Date 05-10-2012

Per Mr.B.A.Shaikh, Hon`ble Presiding Judicial Member.

1.       This appeal is preferred against the judgment and order dated 06/08/2008 passed by the Dist. Forum,Ahmednagar.

2.       Facts in brief giving rise to the appeal are as under.

          The complainant who is the respondent herein filed the complaint with the allegation in brief that, the car bearing No. MH-15-DN-7955 owned by him was  insured with the original opponent i.e. appellant herein for the period from 29/12/2006 to 28/12/2007. The said car was stolen away on 13/12/2007 when the driver of that car had taken it for use by  Smt.Rekha Vaidh one of the surety of that car, from Shirdi to Mumbai. Therefore the complaint was lodged  with the police. The complainant submitted claim with the original opponent i.e. appellant herein claiming the compensation towards loss sustained by him. The original opponent repudiated the claim. Therefore there is deficiency in service provided by the original opponent to him. He therefore claimed  Rs 7,00,000/- towards compensation on account of loss sustained by him due to theft of the insured car. He also claimed Rs 10,000/- towards mental harassment and Rs 10,000/- towards cost of the complaint.

3.       The original opponent i.e. appellant herein filed written version. It admitted that the aforesaid car was insured with it for the period from 29/12/2006 to 28/12/2007 and it was stolen away on  13/12/2007. It submitted that the car was insured under “Private car insurance package policy”. The complainant committed breach of policy by giving the said car on hire basis and therefore it has repudiated the claim of the complainant. It therefore, submitted that complaint may be dismissed.

4.       The Dist. Forum below after considering the facts brought on record and hearing advocates of  both the parties held that the complainant is a consumer and there is deficiency in service provided by the original appellant to the complainant and complainant is entitled to compensation of Rs 5,20,150/- towards the loss sustained by him as his car is stolen away which was insured with the appellant. Therefore it gave direction to the opponent i.e. appellant herein to pay the said amount with interest  to the complainant and also pay him Rs 1,000/- towards  mental harassment and Rs 700/- towards cost of the complaint.

5.       We have heard Adv.Shri.V.N.Upadhye for the appellant and  Adv.Smt.Smita Kulkarni  for the respondent. We have also perused the papers before us.

6.       At the out set it is worthy to note that during the pendancy of this appeal, the aforesaid stolen car belonging to the original complainant i.e. the respondent herein was traced out and seized  by police of  Santacruz  police station, Mumbai. The original complainant moved an application registered as M.A.No.146/2012 before this Commission requesting that direction may be given to the appellant herein to pay visit to Santacruz police station and on inspection of the seized car its present  value may be ascertained from  the expert. The original complainant sought further direction to the original opponent i.e. appellant herein to hand over the papers of the said car to him so as to release the vehicle from  the custody of the Police authority. After hearing on that miscellaneous application, direction was given by this Commission to the appellant herein  to depute its surveyor to inspect the said car and to ascertain its present condition and to assess its present value in presence of the respondent. The appellant herein deputed its surveyor who inspected that car and submitted report to this Commission.  As per the said report, the market value in present  condition on the date of the report i.e. 26/06/2012 is  Rs 2,25,000/-. The said report  is not disputed by  both the parties in this appeal.  We have given direction in the said M.A.No.146/2012  to the appellant herein to handover the original papers of that vehicle to the original complainant so as to get release that car from the custody of the concerned Police Officer.

7.       The advocate of the appellant submits that the Dist. Forum has not properly considered the FIR lodged with the police by the driver of the car stating  that the said car was used for hire and reward at the time of incident. He therefore submitted that there is a breach of policy condition due to use of car for hire and reward and hence the complainant is not entitled to any compensation. He also submitted that there was negligence on the part of the driver of the car as  he left the car with the key and the thieves committed theft by taking away the car in his absence. Thus according to him on this ground also the complainant is not entitled to pay compensation. He also submitted that the surety of the car was Surekha Vaidhay not  Rekha Vaidhay and therefore the case of the complainant can not be believed that the car was sent by him free of charge as called by rekha Vaidhay, the surety  of that car. He further submitted that the counter appeal filed by the original complainant for enhancement of compensation has been dismissed  on the ground of delay. Thus he requested that  the impugned judgment and order may be also set aside.

8.       On the other hand the advocate of the original complainant i.e. respondent herein supported the impugned judgment and order. She also vehemently submitted that even though if it is  presumed that the car was used for hire and reward, then also the complainant can not be denied compensation awarded by the Dist. Forum. She relied upon the observations made in following case

          National Insurance Company Ltd – Versus – Nitin Khandelwal  reported in 2008 (DGLS (Soft) 603. In that case there was repudiation of the claim by Insurance Company  alleging violation to terms of policy. There was theft of the vehicle which was insured as a private vehicle but at the relevant time it was used as a taxi for carrying passengers on payment. The claim was allowed by the State Commission on non-standard basis to the extent of 75 %  which in turn was upheld by Hon’ble National Commission.  It is observed by Hon’ble Supreme Court that in case of theft of vehicle breach of terms of insurance policy is not germane, particularly, nature of use of vehicle cannot be looked into. Company is liable to indemnify the owner of the vehicle when the insurer has obtained comprehensive policy for the loss caused to the insurer  and Company cannot repudiate the claim in toto. The Hon’ble Supreme Court  found no reason to interfere with the said order.

          In reply the advocate of the appellant has relied on the

observation made in following case.

          Jagdeesh Singh – Versus – The United India Insurance Company Ltd, 2007 (1) CPR 230 (NC).  The Hon’ble National Commission held in that case that where  vehicle was found being  used against limitation as to the use, Insurance Company would be justified in repudiation of  claim for theft of vehicle.

8.       It is not in dispute that the car insured with the appellant Insurance Company  belonging to the respondent was stolen away during the period of validity of insurance policy. It is also not disputed that it was comprehensively insurance under the private car insurance package policy. Therefore risk or the loss caused due to theft of the said car was covered under that policy. The only condition raised in the written version of the appellant that the car was used for hire and reward and hence there is breach of policy condition and therefore it is not liable to pay any compensation. The appellant has relied upon the copy of FIR lodged by  the driver of that car about its theft. It’s copy is produced before this Commission. As per that report the said car was called for carrying passengers on hire basis and when the driver of that car taking the passenger of that car, the said driver went to purchase the medicine keeping   key to the steering  of that car, the said car was stolen away. The Dist. Forum below observed in the impugned judgment and order that the car was sent for  taking surety of loan transaction relating to that car and therefore it can not be said that it was used for hire and reward. The Dist. Forum granted  compensation of Rs 5,20,150/- on non standard basis i.e. to the extent of  75 % of the insured amount, relying on the decision of the Hon’ble Supreme Court. We find  no fault in the said order passed by the Dist. Forum. Since the Hon’ble Supreme Court  in the aforesaid case of National Insurance Company – Versus – Nitin Khandelwal  has granted 75 % compensation on non standard basis under identical facts and circumstances. Therefore applying the aforesaid case law to the present case we  hold that the aforesaid compensation granted by the Dist. Forum under  impugned judgment and order is legal,  correct and  proper.  Moreover, as ground of negligence on the part of the driver of car was not taken either in letter of repudiation or  in written version by appellant, it can not be considered in  this appeal.

9.       As observed above stolen car has been seized later on by police and the appellant herein assessed his present value as  Rs 2,25,000/- only. Direction has been already given by this Commission in M.A.No. 146/2012 to the appellant to return the  papers of that car to the complainant so that he may claim the said car from the concerned police station. Thus the amount of Rs 2,25,000/- towards present price of that car is required to be deducted from Rs 5,20,150/- awarded  by the Dist,. Forum below. On making deduction, the balance amount comes to Rs 2,95,150/-. The complainant is entitled to that amount since  he sustained the loss as  insured car was stolen away on 21/01/2007 and it was seized by police during pendency of the appeal and  the value of that car has been reduced  to the extent of Rs 2,25,000/- . Therefore we are inclined to allow this appeal to the extent of modification of the compensation as observed above. Thus, following order is passed.

O   R    D    E   R

1.                 Appeal is partly allowed.

2.                 The impugned judgment and order to the extent of granting of compensation Rs 5,20,150/- to the complainant is modified. Instead of said amounts  the appellant herein shall –pay to the original complainant i.e. original respondent an amount of Rs 2,95,150/- with interest @ 9 % p.a. from  01/07/2007 till  realisation of the said amount. The rest of the order about payment of Rs 1000/- towards mental harassment and Rs 700/- towards cost of the complaint  is hereby maintained.   

3.                 No order as to cost.

4.                 Copies of the judgment and order be sent to both the parties.

K.B.Gawali,                                                 B.A.Shaikh

  Member                                           Presiding Judicial Member