BEFORE THE DAKSHINA KANNADA DISTRICT CONSUMER DISPUTES REDRESSAL FORUM, MANGALORE
Dated this the 23rd of May 2011
PRESENT
SMT. ASHA SHETTY : PRESIDENT
SMT.LAVANYA M. RAI : MEMBER
COMPLAINT NO.218/2010
(Admitted on 13.08.2010)
Mr.Naveen Shetty,
Aged about 40 years,
So. Krishnappa Shetty,
D.No.6 161, Near Thandolige,
Water Tank, Jeppinamogaru,
Mangalore Taluk. …….. COMPLAINANT
(Advocate for the Complainant: Sri.Deenanath Shetty).
VERSUS
The Authorized Signatory and
Branch Manager,
Oriental Insurance Company,
City Branch I, Kulyadi Building,
K.S.R.Rao Road, Hampankatta,
Mangalore. ……. OPPOSITE PARTY
(Advocate for the Opposite Party: Sri.Shrikanta Shetty K).
***************
ORDER DELIVERED BY PRESIDENT SMT. ASHA SHETTY:
1. This complaint is filed under Section 12 of the Consumer Protection Act alleging deficiency in service against the Opposite Party claiming certain reliefs.
The brief facts of the case are as under:
The Complainant is the RC owner of TATA 407 vehicle bearing registration No.KA-19A-8066, the above said vehicle insured with the Opposite Party under policy bearing No.422203/31/2008/7456 commencing from 16.03.2008 to 15.03.2009 for a sum of Rs.2,02,500/-.
It is stated that, on 21.02.2009, in the midnight when the vehicle was proceeding from Hobali Mutha House situated at Hosanagar to Mangalore at a place by name Bramhanathuruve Panchayath, the said vehicle met with a fire accident all of a sudden owing to short circuit got engulfed in fire and destroyed completely. Thereafter, the above accident was reported to the jurisdictional police and mahazar was drawn. After the fire accident, the vehicle was got prepared an estimate dated 11.03.2009 for a sum of Rs.65,000/- and approached the Opposite Party. The Opposite Party surveyed the vehicle through the Surveyor and repudiated the claim of the Complainant as per their communication dated 11.01.2010. It is stated that, the ground stated by the Opposite Party in their repudiation letter is not correct and hence the above complaint filed under Section 12 of the Consumer Protection Act 1986 (herein after referred to as ‘the Act’) seeking direction from this Forum to the Opposite Party to pay a sum of Rs.3,00,000/- along with interest at 12% p.a. from the date of accident till the date of realization and also claimed Rs.25,000/- as compensation and cost of the proceedings.
2. Version notice served to the Opposite Party by RPAD. Opposite Party appeared through their counsel filed version admitted the policy, the coverage and the sum assured under the policy. It is stated that, after receipt of the information with regard to the fire accident, the Opposite Party deputed a Surveyor and the Surveyor assessed the loss of the vehicle and treated as total loss.
It is further stated that, the vehicular documents of the above said vehicle verified and confirmed that “Fitness certificate valid from 02.11.2007 to 01.11.2008” but the accident took place on 21.02.2009, no valid fitness certificate to the said transport vehicle on the date of accident. It is contended that, the Complainant violated Section 56(1) and (3) of the Motor Vehicle Act, 1988 read with Section 38 (2) of the Karnataka Motor Vehicles Rules, 1989 and hence the insurer is not liable to pay any claim and stated that there is no deficiency and prayed for dismissal of the complaint.
3. In view of the above said facts, the points now that arise for our consideration in this case are as under:
- Whether the Complainant proves that the Opposite Party has committed deficiency in service?
- If so, whether the Complainant is entitled for the reliefs claimed?
- What order?
4. In support of the complaint, Sri.Naveen Shetty (CW1) filed affidavit reiterating what has been stated in the complaint and answered the interrogatories served on him. Ex C1 to C13 were marked for the Complainant as listed in the annexure in detail. One Sri.B.Sudhakar (RW1), Senior Divisional Manager of the Opposite Party filed counter affidavit and answered the interrogatories served on him. One Sri.Y.Devadas Alva (RW2), General Insurance Loss Assessor – witness of the Opposite Party filed affidavit and answered the interrogatories served on him. Ex. R1 to R5 were marked for the Opposite Party as listed in the annexure in detail. The Complainant as well as Opposite Party produced notes of arguments along with citations.
We have considered the notes/oral arguments submitted by the learned counsels and also considered the materials that was placed before this Forum and answer the points are as follows:
Point No.(i): Affirmative.
Point No.(ii) & (iii): As per the final order.
Reasons
5. Point No. (i) to (iii):
In the instant case, the facts which are admitted is that, the Complainant is the R.C owner of Tata 407 LMV transport vehicle bearing registration No.KA-19A-8066, the above said vehicle insured with the Opposite Party as per policy No.422203/31/2008/7456 valid from 16.3.2008 to 15.03.2009 for a sum of Rs.2,02,500/- (as per Ex C1). It is also admitted that, the above said vehicle met with fire accident owing to short circuit on 21.02.2009 while the vehicle was proceeding from Hobali Mutha House situated at Hosanagar to Mangalore. The above said accident was registered in jurisdictional police station and drawn mahazar.
The main dispute between the parties before this FORA is that, the Complainant came up with a complaint stating that, the above said vehicle met with a fire accident all of a sudden owing to short circuit and the same was destroyed completely but the Opposite Party despite of furnishing all the relevant documents not honoured the claim but repudiated the claim by sending the communication dated 11.01.2010 stating that non-availability of a valid fitness certificate, hence this complaint.
The Opposite Party on the other hand admitted the policy but contended that before repudiation of the claim of the Complainant verified and confirmed all the vehicular documents from the Regional Transport Office, the ‘B’ register extract of the registration certificate of the vehicle reveals that fitness certificate valid from 02.11.2007 to 01.11.2008 the fire accident took place was on 21.02.2009. So it took a contention that there was no valid fitness certificate to the said vehicle on the date of accident and stated that the repudiation is justifiable and relied terms and conditions of the policy.
The Complainant filed oral evidence by way of affidavit and produced Ex C1 to C13. Opposite Party also filed evidence of RW1 and RW2 and produced Ex R1 to R5.
On scrutiny of the oral as well as documentary and admitted facts available on record, we find that, the vehicle in question is duly insured with the Opposite Party Company and on the date of fire accident the policy was in force. The main dispute is with regard to the fitness certificate pertaining to the vehicle in question. The only contention raised by the Opposite Party is that, as on the date of accident the vehicle had no fitness certificate thereby the Complainant violated Section 56(1) and (3) of the Motor Vehicles Act 1988 read with Section 38(2) of the Karnataka Motor Vehicles Rules 1989. The Complainant did not obtain authorization before expiry of the fitness certificate under Rule 38 (7) of the Karnataka Motor Vehicle Rule 1989 and relied a policy i.e. Ex C1 and argued that the policy standard form of the Complainant clearly mentions under general exceptions that “the insurer shall not be liable ………………….limitations as to its use”. The expired fitness of the vehicle registration No.KA 19A-8066 means, it has no registration as per Section 39 of Motor Vehicles Act 1988 and also violated Section 39 of the Act. It is further argued that, being transport vehicle it is unfit to be plied on road, the requirement of fitness certificate is made by the statute in the public interest and with a view to mitigate the sufferings of the public in general by accidents. The fire caught by self not by any third party act, this draws the attention to the improper maintenance of the said vehicle by the owner and contended that the repudiation is legal.
No doubt, the counsel appearing for the Opposite Party argued in length by relying several sections of the Motor Vehicles Act 1988 but it is unfortunate to note that the Insurance Company despite of knowing that the vehicle had fitness certificate valid from 2.11.2007 to 1.11.2008 issued the above insurance policy despite of knowing that the vehicle had fitness validity only for 7 months. We further observed that, despite of verifying the vehicular documents in question the Insurance Company issued a subject Insurance policy i.e., Ex R1 for a period of one year from 16.3.2008 to 15.3.2009 for a sum of Rs.2,02,500/-. If at all the vehicular document was not in order the Opposite Party Company should not have issued the subject insurance policy for the whole one year. It is seen that, there is no endorsement on the policy for production of fitness certificate in this case.
However, we have noticed that when the claim comes before the Insurance Company, the Insurance Companies have a practice of insisting all the vehicular documents in order to honour the claim. But while receiving the premium of the vehicle they forget to follow the statutory conditions of the motor vehicle Act and Rules framed under the concerned state. The Insurance Company has equal responsibility even while issuing the insurance policy to the concerned vehicle. But while honouring the claim the Insurance Companies come up with a defence stating that they should follow the statutory conditions of the Motor Vehicles Act and Rules. The question is then why did they have not obtained all the vehicular documents at the time of issuing a policy which includes fitness certificate for the whole one year, in other words the date of issuance of policy till the date of validity. Apart from that, we have perused the policy terms and conditions, wherein, the policy do not indicate or contemplate the requirement of the production of valid fitness certificate. In the absence of any such conditions the Insurance Company while honouring the claim of the insured’s incorporating the above statutory obligations and repudiating the claim is not justifiable. And further the policy conditions do not contemplate the applicability of Karnataka Motor Vehicles Rules 1989 or Rule 38 of the Karnataka Motor Vehicles Rule 1989 instead the policy conditions only contemplate Rules applicable to tankers carrying hazardous chemicals. Further the applicability of Chapter III of Motor Vehicles Act as includes thereunder Section 38 and Section 56, Section 60 of the Motor Vehicles Act and the Rules of Karnataka Motor Vehicles Act 1989, under policy conditions or policy certificate there is no mentioning of the above Chapters or provisions. In the absence of any terms and conditions contemplating as to the production of valid fitness certificate by the insured the Opposite Party is precluded from adding words of the statute / policy documents when the policy condition No.5 as pointed out by the Opposite Party do not include. Just because the fitness certificate is not produced the Opposite Party cannot contend that the vehicle was not maintained properly, the observation of the Surveyor to that effect cannot accepted without therebeing any material evidence. In fact the Section “1” of the policy condition, wherein, under the head “loss or damage to the vehicle insured”, the Company will indemnify the insured against loss or damage to the vehicle insured here under and or its accessories whilst thereon, by fire explosion, self ignition or lighting”. But on perusal of the photographs, the mahazar drawn by the police and the report of the Surveyor evident that, the vehicle caught fire owing to electrical short circuit and consequently damage caused to the vehicle and it became total loss. Had the short circuit not occurred, the damage was also would not have occurred and there was no intervening agency which was an independent source of the damage. Hence, we cannot agree with the conclusion of the Surveyor that the vehicle was not maintained properly by the insured etc. etc. When the vehicle met with a fire accident, as per the policy terms and conditions, the Opposite Party Company shall indemnify the insured / Complainant against loss or damage to the vehicle insured. The proximate cause of damage is because of the short circuit of the fire and the Opposite Party not shown to us that the above fire short circuit caused because of not maintaining of the vehicle in question. But in the instant case, the proximate cause is the short circuit of the fire that sets in motion and ultimate the total loss was caused. It is proved beyond doubt that, the short circuit of the fire was efficient and active cause of the damage. We also observed that, no prudent person ply the vehicle in unroadworthy condition because the driver one who drives the vehicle is a human being and no one wants to face the accident on public road. In view of the above discussion, we hold that the repudiation made by the Opposite Party in this case is not justifiable which amounts to deficiency in service as well as unfair trade practice.
We have referred the citation relied by the counsel appearing for the Complainant in a case the Hon’ble Supreme Court of India in New India Assurance Co. Ltd versus Zuari Industries Limited and Others; IV (2009) ACC 390 (SC) held that,
- Insurance – Fire incident – Proximate cause of damage –flashover caused by short circuit – claim repudiated on ground that there was not ‘sustained fire’ – Word used in policy ‘fire’ not ‘sustained fire’ – court cannot add words to statute/document – Fire efficient and active cause of damage proved – Insurer held liable under policy (Paras 14, 15)
- Insurance – Proximate cause of damage – contention, loss not caused by fire, but by stoppage of electricity due to short circuit – Proximate cause of damage, thermal shock, not fire – claim repudiated – proximate cause not a cause nearest in time / place, but active and efficient cause that sets in motion a train or chain of events which brings about ultimate result without intervention of any other force working from independent source – fire was efficient and active cause of damage proved – Insurer held liable under policy.
[Paras 22, 29, 30, 33]
As far as damage is concerned, the Surveyor who assessed the damage of the vehicle and submitted his report dated 09.06.2009 i.e., Ex R4 and stated that the vehicle is treated as a total loss and hence the Complainant is entitled as per the survey report. Therefore, we hereby direct the Opposite Party i.e., Oriental Insurance Company Limited represented by its Branch Manager to pay Rs.2,02,500/- less salvage value Rs.50,000/- and policy excess Rs.1,000/- is equal to 1,51,500/- along with interest at 12% p.a. from the date of accident till the date of payment to the Complainant and also pay Rs.1,000/- as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.
However, the interest as well as compensation both cannot be allowed. Interest is always inclusive of compensation and hence separate compensation not allowed in this case.
6. In the result, we pass the following:
ORDER
The complaint is allowed. Opposite Party i.e., Oriental Insurance Company Limited represented by its Branch Manager is hereby directed to pay Rs.2,02,500/- less salvage value Rs.50,000/- and policy excess Rs.1,000/- is equal to 1,51,500/- (Rupees one lakh fifty one thousand and five hundred only) along with interest at 12% p.a. from the date of accident till the date of payment and also pay Rs.1,000/- (Rupees one thousand only) as cost of the litigation expenses. Payment shall be made within 30 days from the date of this order.
The copy of this order as per the statutory requirements be forwarded to the parties free of charge or sent to the parties under postal certificate and thereafter the file shall be consigned to the record room.
(Page No.1 to 12 dictated to the Stenographer typed by her, revised and pronounced in the open court on this the 23rd day of May 2011.)
PRESIDENT MEMBER
ANNEXURE
Witnesses examined on behalf of the Complainant:
CW1 – Sri.Naveen Shetty – Complainant.
Documents produced on behalf of the Complainant:
Ex C1 – : Copy of the policy bearing No.7456 for the period from 16.03.2008 to 15.03.2009 for a sum of Rs.2,02,500/-.
Ex C2 – 13.03.2008: Receipt issued by the Opposite Party for a sum of Rs.9,744/- along with terms and conditions of the policy.
Ex C3 – 21.04.2006: Goods Carriage Permit.
Ex C4 – : Registration Certificate.
Ex C5 – : Motor vehicle taxation card.
Ex C6 - : Driving licence.
Ex C7 - : Receipt issued by Hosanagara Police Station.
Ex C8 - : Mahazar prepared by Hosanagara Police Station.
Ex C9 – 11.03.2009: Estimation prepared by Nethravathi Body and Automobile Works, Mangalore.
Ex C10 & C11 : Photographs (2 in numbers).
Ex C12 – 22.02.2009: Receipt issued by the jurisdictional police for a fine of Rs.500/-.
Ex C13 – 11.01.2010: Letter of the Opposite Party to the Complainant.
Witnesses examined on behalf of the Opposite Party:
RW1 – Sri.B.Sudhakar, Senior Divisional Manager of the Opposite Party Company.
RW2 – Sri.Y.Devadas Alva, General Insurance Loss Assessor – witness of the Opposite Party.
Documents produced on behalf of the Opposite Party:
Ex R1 – : Certificate cum policy schedule.
Ex R2 – 11.03.2009: Intimation of accident to the Insurance Company by the Complainant.
Ex R3 - : ‘B’ register extract of vehicle KA 19A-8066.
Ex R4 – 09.06.2009: Survey report prepared by Sri.Y.Devdas Alva, General Insurance Loss Assessor.
Ex R5 – 11.01.2010: Repudiation letter issued by the Opposite Party.
Dated:23.05.2011 PRESIDENT
