Per Sri A. Hazarath Rao,  President:-

          The complainant filed this complaint under section 12 of the Consumer Protection Act, 1986 against opposite party seeking payment of Rs.6,41,418.91 ps being the amount spent for the repair of his insured car; Rs.15,000/- towards mental agony and suffering and for costs. 

2.   In brief the averments of the complaint are hereunder:

           The complainant insured his vehicle bearing No.AP23Q6356 with the opposite party and the said policy will be in force from 02-07-11 to                      01-07-12.   On 05-08-11 the complainant along with his family members went Hyderabad.  Complainant’s friends namely Mallikharjuna Rao, Vamsi, Ramanjaneyulu and Sompalli Koteswara Rao also boarded the said vehicle.   At about 00.30 hours all of them had tiffin at the outskirts of Nagarjun Sagar and thereafter started to Hyderabad.   From that place one Mallikharjuna Rao drove complainant’s vehicle.   The said Mallikharjuna Rao drove the said vehicle in a rash and negligent manner, lost control on steering and hit to a big stone on left side.   All of them sustained injuries and the said car was fully damaged.   The complainant immediately intimated the occurrence of the accident to the insurance company and submitted claim forms claiming compensation.  The opposite party appointed a surveyor to assess the loss who in turn inspected the damaged vehicle and assessed the loss. Garage people inspected the car and estimated the repair at Rs.6,41,418.91 ps.   Even after a lapse of an year the opposite party failed to settle the claim inspite of repeated requests.   The opposite party on 04-09-12 repudiated the claim on flimsy and untenable grounds and such repudiation amounted to deficiency of service.   The complainant suffered a lot mentally and financially due to the said behaviour of the opposite party.   The complaint therefore be allowed.     

3.  The contention of the opposite party in nutshell is hereunder:

          The complainant insured his Maruthi Ritz car bearing No.AP23Q 2356 as a private vehicle under package policy by declaring its value as Rs.3,50,000/-.   The policy is valid from 02-07-11 to 01-07-12.   After receipt of intimation the opposite party appointed T. Hanuma Reddy for conducting sport survey.   The said surveyor on 12-09-11 submitted a report stating that the delay was due to non co-operation of the complainant.   The opposite party on the same day appointed one G.V. Sudhakar Rao to conduct final survey.  The said Sudhakar Rao concluded his report suggesting the opposite party to settle the claim on cash loss basis instead of repair loss basis and total basis.  The said surveyor in his report further stated that the insured had accepted to settle the claim at Rs.2,00,000/- on cash loss basis.  On 11-01-12 the complainant gave acceptance and unconditional concurrence letter for getting the claim settled for Rs.1,75,000/-.   The complainant disposed off the reck vehicle without prior approval or consent violating policy terms and conditions.   After completion of loss assessment the opposite party again appointed T. Hanuma Reddy to investigate the matter whether the vehicle was used for own purpose or for hire or for reward.  The said Hanuma Reddy after obtaining statements of Ramanjaneyulu, Somepalli Koteswara Rao, Mallikharjuna Rao opined that they hired the vehicle.   Thus the complainant violated the limitations for the use.   Under those circumstances, the opposite party repudiated the claim and did not commit any deficiency of service. The complainant is guilty of suppression of facts.  The complaint therefore be dismissed.

4.   Exs.A-1 to A-12 on behalf of complainant and Exs.B-1 to B-9 on behalf of opposite party were marked.  

5.    Now the points that arose for consideration in this case are these:

1. Whether the opposite party committed deficiency of service?
2. Whether the complainant is entitled to any compensation?
3. To what relief?

6.   Admitted facts in this case are these:

1. The complainant insured his Maruthi Ritz vehicle No.AP23Q6356 with the opposite party (Ex.A-1 = B-1) for Rs.3,50,000/- (IDV).
2. The policy was in force at the time of accident.
3. The complainant submitted claim forms to the opposite party.
4. The opposite party gave reply (Exs.A-4 and A-5).

7.   POINT No.1:-   The opposite party under Ex.A-5 repudiated the claim contending that the vehicle was used for commercial purpose/hire/reward at the time of accident as against the limitations as to use of the vehicle.   The learned counsel for the complainant relied on the decision reported in 2010 SAR (civil) 405. On the other hand, the learned counsel for the opposite party relied on the decisions reported in 2007 (1) CPR 230 (NC)                 2004 (IV) CPJ 49 (SC) and 2009 (4) CPR 90 (NC).  

8.      In Jagdish Singh vs. the United India Insurance Company Limited 2007 (1) CPR 230 (NC) it was held that insurance company would be justified in repudiating the claim for theft of vehicle when it was found being used against limitation as to use.  

9.   In Polymat India Private Limited vs. National Insurance Company 2004 (IV) CPJ 49 (SC) it was held that terms of contract to be construed strictly without altering the nature of contract.  

10.  In New India Assurance Company Limited vs. Smt Leela Bai Devi Chand Jain 2009 (4) CPR 90 (NC) it was held that the surveyor report carries vital significance and cannot be brushed aside on untenable grounds.

11.    In this case the opposite party repudiated the claim alleging that the complainant was using the vehicle for hire though insured as a private vehicle.  

12. In Amalendra Sahu vs. Oriental Insurance Company                           2010 SAR (civil) 405 it was held:

     “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:-

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 view of the above judgment of Supreme Court the decisions replied on by the opposite party in no way help them.   75% of Rs.3,50,000/- comes to Rs.2,62,500/-.   The opposite party filed Ex.B-5 letter dated 11-01-12 said to have been given by the complainant to the Regional Manager of the opposite party company, Visakhapatnam.   The opposite party mentioned that letter both in its version and affidavit.   But the complainant did not refute the same.   In Ex.B-5 dated 11-01-12 it was mentioned “with reference to the above and I referred to my discussions had with Sri K. Ramesh Babu, Branch Manager, Chilakaluripet hereby accept and give my unconditional concurrence for the claim settlement of Rs.1,75,000/- in full and final settlement of the claim  and subject to terms and conditions of the insurance policy issued”.   Inspite of that letter the opposite party repudiated the claim under Ex.B-9.   The opposite party cannot blow hot and cold at the same breath.    The opposite party repudiating the claim inspite of Ex.B-5 dated 11-01-12 said to have been given by the opposite party amounted to deficiency of service.   The complainant is therefore entitled to have Rs.1,75,000/- from the opposite party.   We therefore answer this point accordingly in favour of the complainant.

14. POINT No.2:-  The complainant claimed Rs.15,000/- as damages towards mental agony and suffering.  The opposite party took about ten months time to repudiate the claim though Ex.B-5 was on 11-01-12.   The above conduct of the opposite party would cause mental agony under the above circumstances to any insurer.   Awarding a sum of Rs.10,000/- in my considered opinion will meet ends of justice as damages.

15.  POINT No.3:-   In view of above findings, in the result the complaint is partly allowed as indicated below:

1.  The opposite party is directed to pay Rs.1,75,000/- (one lakh                           seventy five thousand only) to the complainant together with                         interest @9% p.a., from the date of complaint till payment.

2. The opposite party is directed to pay Rs.10,000/- (Rupees ten                           thousand only) as compensation to the complainant.

3.  The opposite party is directed to pay Rs.2,000/- (Rupees two                           thousand only) towards costs to the complainant.

4.  The amounts ordered above shall be paid within a period of six                         weeks from the date of receipt of the copy of the order.

          Typed to my dictation by Junior Steno, corrected by me and pronounced in the open Forum dated this the 30^th day of April, 2013.

MEMBER                                  MEMBER                           PRESIDENT

APPENDIX OF EVIDENCE

DOCUMENTS MARKED

For Complainant:

For opposite party:    

     PRESIDENT

NB:   The parties are required to collect the extra sets within a month after receipt of this order either personally or through their advocate as otherwise the extra sets shall be weeded out.