D.o.F:10/08/2011

D.o.O:16/01/12

IN THE CONSUMER DISPUTES REDRESSAL FORUM, KASARAGOD

                                      CC.201/11

                   Dated this, the 16th   day of January 2012.

PRESENT

SRI.K.T.SIDHIQ                          : PRESIDENT

SMT.P.RAMADEVI                      : MEMBER

SMT.BEENA.K.G.                          : MEMBER

Shyamala.C.K, W/o Bahuleyan,

Shyam Nivas, H.No.10/2097,

Pallikkare PO,Kasaragod.                              : Complainant

(in person)

The Manager,

United India Insurance Co.Ltd,

Nithyananda Building,Main Road,                : Opposite party

Kottacherry,PO.Kanhangad.

(Adv.C.Damodaran,Kasaragod)

                                                    ORDER

SRI.K.T.SIDHIQ : PRESIDENT

  The only question to be settled in this case is whether the plying of a vehicle with an expired fitness certificate would absolve the insurer from settling own damage claim?

   The gist of the case is that the Chevrolet Tavera taxi vehicle bearing Reg.No. KL-60/A 2748 was involved  in an accident  when it had a valid insurance policy.  However opposite party repudiated the claim on the ground that  if the material  time of accident the vehicle has no fitness certificate.  Hence the complaint.

2.  According to opposite party the fitness of the vehicle was expired on 24/8/10 and fee for renewal of application of fitness was remitted only on  27/8/10.  The claim  could  not be paid as the vehicle was not having a fitness certificate on the date of accident.  Hence there is no deficiency in service on their part.

3.  Complainant filed proof affidavit and Exts.A1 to A5 marked.  On the side of opposite party Exts.B1&B2 marked and both sides heard.

4.   Ext.A1 is the copy of RC  of the vehicle bearing Reg.No.KL-60/A 2748.  It is seen from  Ext.A1 that  it is a  2008 model vehicle registered on 25/8/2008.  Ext.A2 is the copy of permit in respect of the said vehicle.  The permit is valid from 23/10/2008 to 22/10/2013.  Ext.A3 is the copy of application for renewal of certificate  of fitness.  Ext.A4 is the copy of cash receipt dtd.27/8/2010 evidencing  the payment of fee for the renewal of fitness certificate to the vehicle KL 60/A 2748.  Ext.A5 is a copy of the complaint lodged by the complainant before the grievance cell of the insurance company.

5.  On the side of  opposite party Exts.B1&B2 marked.  Ext.B1 is the extract of registration particulars of the vehicle of complainant.  Ext.B2 is the copy of surveyor’s report, the surveyor has assessed  the damage on cash loss basis at `.281414.53 and on total loss basis the assessment is `405100/- and the salvage loss assessment is `.400100/-.  In the said report the surveyor  has reported that cash loss  basis is the lowest assessment.  It is further reported that the fitness certificate was expired on 24.8.2010 and the vehicle is involved in the accident on 17/9/2010.

6.   From the above documents produced it is clear that the complainant was diligent  in renewing  the fitness certificate and her application  for renewal of fitness certificate was pending before the Transport Authority.  This would show that her vehicle was not  in an abandoned  stage and was a comparatively new one of  2 years age. So what is remaining to obtain fitness certificate was only a procedural  regularity/formality.  In such a situation  repudiating the  whole claim is toto is appears to be deficiency in service on the part of opposite party.

7.   The learned counsel for opposite party Sri.C.Damodaran submitted that the insurance is a  contract and parties to the contract are bound to fulfill their obligations.  Since the complainant does not perform  this part of contract by keeping a valid fitness certificate for the insured vehicle, the insurer cannot be compelled to perform the contract.  Hence according to him the repudiation is legal and it does not amounts to any deficiency in service.  He placed reliance on the decision reported in  2009(2)KLT 707 in the case of Thara vs. Syamala to substantiate his contentions.  In the said decision it is held  by the Hon’ble High Court of Kerala that the use of vehicle with fitness  certificate and permit will entitled  insurer to dishonor liability under policy.

8.  But we are unable to accept this contention in view of the decision of the Hon’ble Apex Court in the case of Amalendra Sahoo vs. Orientel Insurance Co. reported in II(2010) CPJ (SC).

9.   In that case the Hon’ble  Supreme Court relying on the cases National Insurance Co.Ltd vs. Nitin Khanddeal reported in 2008(7) SCALE 351,  and in United India Insurance Co.Ltd vs. Gian Singh reported in 2006 CTJ 221 (CP) (NCDRC) has held that in case of violation of condition of the policy as to the nature of use of the vehicle, the claim ought to be settled on non-standard basis.

10.   Again the Hon’ble National Commission in the case of New India Assurance Co.Ltd vs. Narayan Prasad Appaprasad

Pathak reported in (2006) CPJ 144(NC) while answering to the question whether the insurance company can repudiate the

claim in a case where the vehicle carrying passengers and the driver did not have a proper driving license which  met 

with an accident, has been explained the general guide lines set out by the General Insurance Company about the settling of  all such non-standard claim and held that  such claim  ought to have settled as per that guide lines.

11.  One of the guideline mentioned in that case is that the insured is entitled for 75% of the warranty/admissible claim in

case of breach of policy conditions including limitations as to its use. 

12.   Apart from all the above, whether the complainant is entitled to reimbursement of loss /damage caused to the

vehicle from the insurance company as the complainant plied the vehicle without ‘fitness certificate’ is directly answered

by the Hon’ble National Commission in the case of G.Kothainachiar vs. the Branch Manager, United India Insurance

Co.Ltd in  Revision Petition No.1503/2004 dtd 29/10/2007(see confonet).  In this case the National Commission

referring to several judgment of the Hon’ble Apex Court has held that the repudiation of claim amounts to deficiency in service  and the  insurer is therefore liable to compensate the claimant.

13. Hence applying the above guidelines and also in view  of the judgments of the Hon’ble Supreme Court and a National Commission we are of the view that complainant is entitled for 75% of the amount assessed by the surveyor.

14.  The surveyor has assessed the damages on 3 basis.  According to him as per cash  loss basis  the net assessment  is ` 281414.53 and on total loss basis the net liability is 405100/- and on salvage loss assessment it is ` 400100/-.

 15.   In our view the settlement of claim on salvage loss basis will be fair and reasonable to make good the loss sustained to the complainant.  That amount is 400100/- since the claim ought to be settled  as  non-standard basis, the insurer is entitled to settle  the claim after deducting 25% of  the  assessed amount.  Thus  the  amount will be 400100-100025= ` 300075/-( Rupees three lakhs seventy five only) The complainant is entitled to get that amount.

   In the result complaint is allowed and opposite party is directed to pay `300075/-( Rupees three lakhs seventy five only) to the complainant with interest @9% per annum from the date of complaint till payment together with a cost of `4000/-.  Time for compliance is limited to 30 days from the date of receipt of copy of order.

Exts:

A1- copy of RC 

A2 -copy of permit

A3- copy of application for renewal of certificate  of fitness.

A4- copy of cash receipt dtd.27/8/2010

A5 is a copy of the complaint

B1-Registration particulars

B2-24/2/11-Motor survey report

MEMBER                                               MEMBER                                  PRESIDENT

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