BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
F.A.No.835 OF 2012 AGAINST C.C.NO.235 OF 2011 DISTRICT FORUM-II VIJAYAWADA AT KRISHNA DISTRICT
Between:
1. Cholamandalam Ms General Insurance Co.Ltd.,
C/o Darte House, 2nd Floor, No.2, NSC
Bose Road, Chennai-001
2. Cholamandalam MS General Insurance Co.Ltd.,
Branch Office, Vijayawada Appellants/opposite parties’ no.1 & 2
A N D
Sri M.Srinivasa Rao S/o Venkaiah
D.No.2-138, Perkeedu, Kanmolu
Bapulapadu Mandal, Krishna Dist.-105
Respondent/complainant
Counsel for the Appellant M/s A.Ramakrsihna Reddy
Counsel for the Respondent M/s Vemuri Srinivas
QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER
MONDAY THE ELEVANTH DAY OF MARCH
TWO THOUSAND THIRTEEN
Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)
***
1. The appeal is filed by M/s Cholamandalam Ms General Insurance Company Limited questioning the reasonableness of the order of the District Forum directing it to pay an amount of Rs.1,40,467.50 ps with interest @ 9% p.a. and costs.
2. The respondent insured his Lorry bearing NO.AP 02 W 5277 with the appellant insurance company under comprehensive insurance policy No.3379/00415352/000/00 for period commencing from 30.01.2010 to 29.01.2011. The lorry met with an accident on 20.08.2010 near Googuru within the limits of Dagadathi PS Nellore District while proceeding from Nellore to Guduru another lorry applied sudden breaks resulting the complainant’s driver dashed the vehicle from behind as a result the lorry of the complainant was fully damaged. The respondent claimed a sum of `5 lakhs on the basis of the receipts.
3. After receiving intimation of the accident, the appellant insurance company appointed surveyor Ravindra Reddy to estimate the loss. The appellants repudiated the claim on the ground that there was violation of the terms and conditions of the insurance policy. The respondent got issued notice dated 27.1.2011 to the appellants.
4. The appellants resisted the case contending that the respondent failed to mention the registered number of another lorry. The driver of the respondent’s vehicle without leaving distance hit the lorry which was going in front of respondent’s lorry. The respondent’s vehicle was carrying passengers at the time of accident which is in violation fo the terms and conditions of the policy. The respondent’s vehicle was registered as Goods Carrying Commercial Vehicle. At the time of accident there were six passengers travelling in the insured vehicle including the driver as against the permitted seating capacity of the vehicle as per the registration certificate, ‘ three’ . As such it is a serious violation of policy conditions. The appellants deputed IRDA licensed Surveyor to inspect and assess the loss and he assessed the loss at `1,40,467.50.
5. The respondent filed his affidavit and the documents, Exs.A1 to A7. On behalf of the appellants, its Manager-Claims filed his affidavit and the documents Exs.B1 and B2.
6. The District Forum allowed the complaint on the premise that the accident occurred due to the fault on the part of ongoing vehicle and by relying on the judgment of the Hon’ble Supreme Court in “BV Nagarju Vs Oriental Insurance Company”, the District Forum awarded the amount estimated by the Surveyor at `1,40,467.50ps towards repairs.
7. Aggrieved by the order of the District Forum, the opposite parties have filed the appeal contending that the respondent had committed fundamental breach of the terms of the insurance policy by allowing unauthorized persons to travel in the lorry and the accident occurred due to the driver not maintaining the reasonable distance as required.
8. The points for consideration are:
1. Whether the persons travelling in the vehicle are permitted to be carried in the lorry and the accident occurred due to their sitting in the lorry.
2. To what relief?
9. POINT NO.1 The vehicle belonging to the respondent and its insurance coverage by the insurance policy as also the vehicle meeting with an accident on 20.08.2010 at Dagadathi PS Nellore District are not disputed. The respondent claimed for the repairs of an amount of Rs.5 lakhs. It is contended on behalf of the appellant insurance company that the seating capacity of the Insured Vehicle is only three i.e., driver, cleaner and owner of the goods and no other persons can be permitted to sit along with them in the lorry.
10. The learned counsel for the appellant has relied upon the decision of the Hon’le Supreme court in Vikram Greentech India Limited Vs New India Assurance Co., Ltd., “ (2009) 5 SCC 599. The Supreme Court held that:
An insurance contract, is a species of commercial transactions and must be construed like any other contract to its own terms and by itself. In a contract of insurance, there is requirement of uberimma fides i.e. good faith on the part of the insured. Except that, in other respects, there is no difference between a contract of insurance and any other contract. The four essentials of a contract of insurance are, (i) the definition of the risk, (ii) the duration of the risk, (iii) the premium and (iv) the amount of insurance. Since upon issuance of insurance policy, the insurer undertakes to indemnify the loss suffered by the insured on account of risks covered by the insurance policy, its terms have to be strictly construed to determine the extent of liability of the insurer
11. The learned counsel for the appellant has also relied upon the decision of the Supreme Court in “United India Insurance Co., Ltd., Vs Davinder Singh” 2008 (1) ALD 42 (SC). The Hon’ble Supreme Court held that:
Different considerations would arise in a case of this nature, as the consumer forum established under the Consumer Protection Act, 1986 was concerned only with a question as to whether there was deficiency of service on the part of the appellant or not. A right on the part of the Insurance Company not to pay the amount of insurance would depend upon the facts and circumstances of each case. It in certain situation may be bound to pay the claim made by the third party; if the same is filed before a forum created under the Motor Vehicles Act. But defence may be held to be justified before a different forum where the question raised is required to be considered in a different manner
12. The Apex Court has relaxed the stringent effect of the terms of the insurance policy in a case where the breach of the terms committed by the insured is not fatal nor fundamental so as deprive the insured of the amount assured under the insurance policy. The Hon’ble Supreme Court in “Amalendu Sahoo Vs. Oriental Insurance Company Ltd”., reported in II (2010) CPJ 9 (SC) approving the decision of the National Commission in “New India Assurance Company Ltd., Vs. Narayan Prasad Appaprasad Pathak” reported in II (2006) CPJ 144 (NC) opined that in cases where breach of conditions including the limitation as to the use directed the same to be settled on non-standard basis. For benefit of appreciation, we reproduce the same hereunder :
14. 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 license 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 up to 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.
13. In the light of the aforementioned decision the appellant insurance company has to settle the claim of the complainant on non-standard basis. The surveyor has assessed the damage caused to the insured vehicle at `1,40,467.50. As per the decision of the Hon’ble Supreme Court, 75% of admissible claim has to be awarded. Three fourth of `1,40,467.50/- is `1,05,350/- to which the respondent is entitled to. Accordingly, the appeal deserves to be allowed reducing the amount from `1,40,467.50/- to `1,05,350/-.
14. In the result the appeal is allowed. The order of the District Forum is modified. The opposite party /insurance company directed to pay `1,05,350/- together with costs of `2,000/-. Time for compliance four weeks. The parties shall bear their own costs in the appeal.
MEMBER
MEMBER
Dt.11.03.2013
కెఎంకె*
