Haryana

StateCommission

A/1273/2017

KASHMIR SINGH - Complainant(s)

Versus

SBI GENERAL INSURANCE COMPANY LTD. - Opp.Party(s)

RAM PAL VERMA

19 Sep 2018

ORDER

STATE CONSUMER DISPUTES REDRESSAL COMMISSION HARYANA, PANCHKULA

                                                 

First Appeal No         1273 of 2017

Date of Institution:      25.10.2017

Date of Decision :       19.09.2018

 

Kashmir Singh son of Chhota Lal @ Chhote, resident of Village Jakhoda, Tehsil Bahadurgarh, District Jhajjar.

 

                                      Appellant-Complainant

Versus

 

SBI General Insurance Company Limited, through its Branch Manager, 1^st and 2^nd Floor, SCO No.457-258, Sector 35C, Chandigarh-160035

                                      Respondent-Opposite Party

 

CORAM:             Hon’ble Mr. Justice Nawab Singh, President.

                             Shri Balbir Singh, Judicial Member.

 

                            

Argued by:          Shri R.P. Verma, Advocate for appellant

                             Shri Inderjit Singh, Advocate for respondent

 

 

                                                   O R D E R

 

NAWAB SINGH J.(ORAL)

 

This complainant’s appeal is directed against the order dated September 13^th, 2017 passed by District Consumer Disputes Redressal Forum, Jhajjar (for short, ‘District Forum’) whereby complaint was dismissed.

2.      Kashmir Singh-complainant got his vehicle bearing No.HR13G-3342 insured with SBI General Insurance Company Limited-opposite party (for short, ‘Insurance Company’) for the period May 31^st, 2015 to May 30^th, 2016. The Insured Declared Value (IDV) of the vehicle was Rs.2,20,000/-. On April 20^th, 2016, the vehicle met with an accident. The surveyor, appointed by the Insurance Company, assessed the loss at Rs.1,41,435/-.  The claim submitted by the complainant was repudiated by the Insurance Company. Hence, the complainant filed complaint under Section 12 of the Consumer Protection Act, 1986 before the District Forum.

3.      The Insurance Company, in its written version, pleaded that the vehicle was insured as private vehicle but was being used for hire and reward at the time of accident.  Thus, the complainant violated the condition of the policy.

4.      The question for consideration before this Commission is as to whether the Insurance Company was justified in repudiating complainant’s claim or not?

5.      Indisputably, the vehicle met with an accident during the subsistence of the insurance policy.  The only ground taken by the Insurance Company is that the vehicle was being used for hire and reward at the time of accident.  No other violation was pointed out by the Insurance Company.  This ground would not make it a case of a fundamental breach of the policy conditions, even if it was an established case of a private vehicle having been used for purposes of hire.  Were it so, the complainant would still be entitled to settlement of the claim on non-standard basis. In Amalendu Sahoo Versus Oriental Insurance Company Limited, 2010 CTJ 485 (Supreme Court), Hon’ble Apex Court 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 nonstandard 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:

         

S.No.	Description	Percentage of settlement
(i)	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.
(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.” 

 

6.      The Hon’ble National Consumer Disputes Redressal Commission, New Delhi in Revision Petition No.3001 of 2015, Vijay Kumar Digambarappa Vs. Manager, Bajaj Allianz General Insurance Co. Ltd. & Anr. decided on February 22^nd, 2016 held as under:-

“8.     In my opinion, the use of a vehicle registered as a private car for, reward or hire cannot be said to be fundamental so as to entitle the insurer to wholly deny the benefit of the insurance to the insured in a case of accident.  This is not a case where the vehicle was plied on the road without fitness or registration.  Here there was no bar on using the vehicle at a public place, though having been registered as a private car it could not have been used as a taxi.  Had the insured got the vehicle registered and insured as a taxi, the insurer could have charged a higher premium but could not have refused to insure the vehicle.  The insurer in such a case is only deprived of the higher premium which it could have recovered had the vehicle been registered and insured as a taxi.  In my opinion, such a breach of the terms of the insurance policy cannot be said to be fundamental so as to permit the insurer to repudiate the claim in its entirety.  Therefore, the claim in such cases ought to be settled on a non-standard basis.”

 

7.      In view of the law enunciated above, it is held that the Insurance Company wrongly repudiated the claim of the complainant. Thus the District Forum fell in error in dismissing the complaint. Accordingly, the appeal is accepted and the impugned order is set aside.  The Insurance Company is directed to pay Rs.1,06,076.25, that is, 75% of Rs.1,41,435/- (assessed amount)  alongwith interest at the rate of 9% per annum from the date of filing of the complaint, that is, October 19^th, 2016 till realization and Rs.5,000/- as litigation expenses to the complainant within a period of 30 days from the date of receipt of the order otherwise, it will carry interest at the rate of 12% per annum, till realization.     

 

Announced 19.09.2018

(Balbir Singh) Judicial Member

(Nawab Singh) President

UK