DISTRICT CONSUMER DISPUTES REDRESSAL FORUM-II

U.T. CHANDIGARH

Mohit Goyal son of Sh. Naresh Goyal, resident of House No.77-A, Tagore Nagar, Civil Lines, Ludhiana.

                                      ---Complainant.

Versus

1.                 The New India Assurance Company Ltd., Regional Office, SCO No.36-37, Sector 17-A, Chandigarh through its Regional Manager.

2.                 The New India Assurance Company Ltd., Divisional Office, SCO No.58, Sector 26-C, Chandigarh through its Divisional Manager.

---Opposite Parties.

BEFORE:  SHRI LAKSHMAN SHARMA                 PRESIDENT

                   SMT. MADHU MUTNEJA                       MEMBER

                   SHRI JASWINDER SINGH SIDHU       MEMBER

Argued by:  Sh. Harish Sharma, Counsel for the complainant

                        Sh. Navin Kapur, Counsel for the OPs.

PER LAKSHMAN SHARMA, PRESIDENT

1.                           Sh. Mohit Goyal has filed this complaint under Section 12 of the Consumer Protection Act, 1986 (hereinafter referred to as the Act only) praying for the following reliefs :-

i)                   to pay a sum of Rs.5,00,000/- as compensation for mental agony and physical harassment.

ii)                To indemnify the complainant for a sum of Rs.88,760.92 spent by him for the repair of the vehicle in question.

iii)              To pay Rs.11,000/- as litigation expenses.

2.                           In brief the case of the complainant is that he is owner of car (Tata Indica model 2011).  It was registered as a commercial vehicle bearing registration No.PB-10-DF-4229.  The complainant took a commercial package policy for the said car which was valid from 20.6.2011 to 19.6.2012.  He paid a sum of Rs.20,234/- as premium. According to the complainant, the said car was being used as a taxi and a permit was issued by the Regional Transport Authority, Ludhiana on 14.8.2011 which was valid upto 8.8.2016.

It has further been pleaded that on 26.9.2011 the said vehicle was being driven by one Manoj Kumar who was employed as a driver on the car.  Suddenly a stray dog came in front of the vehicle.  In order to save the dog, the driver turned the vehicle, as a result of which the vehicle struck into a pole.  Consequently, the vehicle was badly damaged.  However, no one received injuries.

It has further been pleaded by the complainant that the matter was immediately reported to opposite party No.1 who appointed Sh. Manish Chawla as a surveyor.  Sh. Manish Chawla visited the spot and inspected the car.  He assessed the loss to the tune of Rs.88,760.92.  Thereafter, the complainant was permitted to get the car repaired.  Accordingly, the complainant took the car to M/s Garyson Motors, Ludhiana and got the car repaired.  He paid a sum of Rs.88,760.92 as repair charges. Thereafter the complainant submitted his claim for indemnification of the above said expenditure incurred by him on repairs alongwith all the necessary documents.  However, to his astonishment, the claim was repudiated by the opposite parties vide letter dated 6.12.2011  on the ground that the driver of the vehicle was not having a valid and effective driving licence and the matter was not reported to the police. According to the complainant, the repudiation of the claim amounts to deficiency in service.

In these circumstances the present complaint has been filed seeking the reliefs mentioned above.

3.                           In their written statement the opposite parties admitted that the car in question was insured for the period in question.  It has also been admitted that the car was being used as a taxi.  According to the opposite parties, the accident took place on 16.9.2011 whereas intimation regarding the said accident was given to the opposite parties on 28.9.2011 vide letter (R-2). On receipt of this letter, Mr. Manish Chawla was appointed as surveyor who inspected the vehicle and assessed the loss to the tune of Rs.55,000/- only.  However, it came to the notice of the surveyor that the person who was driving the vehicle at the relevant time was not having a valid and effective driving licence. He was having a driving licence authorizing him to drive a light motor vehicle.  The said licence was not having the endorsement to drive a transport vehicle.  Furthermore, according to the opposite parties, no intimation was given to the police regarding the said accident.  So, neither any DDR nor any FIR was recorded. Thus, according to the opposite parties, the complainant violated the terms and conditions of the policy.  Therefore, he is not entitled to the claim filed by him.  So, the repudiation of the claim does not amount to deficiency in service and the complaint deserves dismissal.

4.                           In the replication filed by the complainant the facts pleaded in the complaint have been reiterated and the facts mentioned in the written statement have been denied.

5.                           We have heard the learned counsel for the parties and have gone through the documents on record.

6.                           Annexure C-7 is the letter issued by the opposite parties to the complainant which reads as under :-

                        “Sir,

                        Reg :    Accidental claim of your vehicle. Regd.No.PB10DF4229 make Tata Indica (Taxi) Model 2011 covered under policy No.35330031110100001265, claim No.31/11/222 DOA 26.9.2011.

                        This has reference to our previous letter dt. 30.11.2011 in regard to the above & compliance of which is still awaited from you.  On further scrutiny of your above claim it has been observed as under :-

(1)               Being a commercial vehicle you have neither arranged the spot survey of the vehicle nor lodged any DDR/FIR which is mandatory in commercial vehicles policy terms & conditions.

(2)               The driver of vehicle Mr. Manoj Kumar was having a DL No.70699/Dup. dt. 5.4.02 valid upto 13.6.2020 issued by LA Ludhiana which was valid to drive M.Cycle, M.Car only & was not valid to drive commercial vehicles.  Hence he was not having a valid Driving Licence at the time of accident.

Keeping in view the above the said claim is not maintainable as per terms & conditions of policy.  If you have anything to say in this regard you are requested to contact us with documentary evidence within 10 days of the receipt of this letter, failing which we shall be constrained to repudiate your claim & close the file as No claim.”

7.                           From the perusal of this letter it is apparent that the clarifications were sought regarding the fact as to whether Sh. Manoj Kumar was having a valid and effective driving licence authorizing him to drive a transport vehicle and as to whether any DDR/FIR was recorded regarding this accident.  Furthermore, it has been mentioned in this letter that if the above said information is not given within 10 days, it shall be deemed that the claim has been repudiated on the grounds mentioned above.

8.                           Thus the case of the opposite parties is that (i) no intimation was given to the police regarding the accident; and (ii) Manoj Kumar was not having a valid and effective driving licence to drive a transport vehicle.

9.                           As far the first point is concerned, the relevant portion of condition No.1 under the heading ‘Conditions’ in the policy, issued by the opposite parties reads as under :-

            “1.        ……… In case of theft or criminal act which may be subject of a claim under this policy the insured shall give immediate notice to the police and co-operate with the Company in securing the conviction of the offender.”

10.                       From the perusal of this condition it is apparent that the police has to be informed in case of theft of a car, or criminal act which may be subject of claim.  In the present case, as mentioned above, the car met with an accident.  It collided with a pole while the driver was trying to save a stray dog who had come on the road.  No one received injuries in the said accident.  In these circumstances it is not a criminal act which may be subject of claim, nor is it a case of theft. So, in such circumstances, it was not incumbent upon the complainant to lodge FIR or to report the matter to the police.  Therefore, failure on the part of the complainant to report the matter to the police is of no consequence and the claim could not have been repudiated on this score.

11.                       The next reason for which the claim was repudiated is that Manoj Kumar was not having a valid and effective driving licence.  Annexure C-5 is a copy of the driving licence.  From a bare reading of this document, it is apparent that he was authorised to drive “M.Cycle M. Car only”.  Admittedly, the vehicle in question is a motor car, though the same was being used as a taxi and the complainant had a valid permit to use the car as a taxi.  Our attention was drawn by the ld. Counsel for the opposite parties to Section 3 of the Motor Vehicles Act which reads as under:-

                   “3. Necessity for driving licence.—(1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issued to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle other than a motor cab hired for his own use or rented under any scheme made under Sub-section (2) of Section 75 unless his driving licence specifically entitles him so to do.”

Relying upon this Section it was argued vehemently by the ld. Counsel for the opposite parties that as the vehicle in question was a transport vehicle, so a specific authorization was required to drive a transport vehicle.  As there was no such authorization, the driving licence is not valid.  In support of this contention, the ld. Counsel has cited the case New India Assurance Co. Ltd. Vs. Prabhu Lal-I(2008) CPJ 1 (SC).  The Hon’ble Supreme Court, after going through various provisions of the Motor Vehicles Act held that for driving a transport vehicle, it is necessary that the driver of the said vehicle should have an endorsement on the licence to drive a transport vehicle.  In the absence of such an endorsement, the driving licence is not valid and the Insurance Company is not obliged to allow the claim in such circumstances. 

12.                       It is pertinent to mention here that guidelines have been issued by the GIC for the Insurance Company to settle the claim in cases where there is violation of terms and conditions of the insurance policy.  Clause 10 of the said guidelines reads as under :-

“10. Non-standard claims

Following types of claims shall be considered as non-standard and shall be settled as indicated below after recording the reasons:

While deciding the case titled as New India Assurance Co. Ltd. Vs. Prabhu Lal (supra), the said guidelines were not brought to the notice of the Hon’ble Supreme Court.  However, in case titled as New India Assurance Co. Ltd. Vs. Narayan Prasad Appaprasad Pathak-II (2006) CPJ 144 (NC), the Hon'ble National Commission observed as under :-

 “4.       The findings returned by the State Commission on the point of the vehicle carrying more than the licensed capacity cannot be made a ground for relying on the judgment in the case of B.V. Nagaraj v. Oriental Insurance Co., II (1996) CPJ 28 (SC)=AIR 1996 2054. This judgment has again not dealt with the settlement of claim on non-standard basis. There is no dispute that the vehicle was registered on 7.4.95 and it met with an accident on 17.4.96, the vehicle was already over one-year old. The vehicle had been purchased admittedly for Rs.5,40,000/-. Hence as per depreciation of 20% applied by the Income-tax Department, the value of the vehicle would be 4,32,000/-. Not having proper valid licence to drive a Maxi-cab as also carrying excess passengers than the licensed capacity are violation of the terms and conditions of the Policy. It is for covering these contingencies that GIC has issued the Guidelines for the Insurance Company for settling the claim on ‘non-standard basis’, which is as follows:”

After relying upon the GIC guidelines mentioned above, the Hon'ble National Commission held that keeping in view these guidelines the repudiation of the claim by the Insurance Company cannot be sustained and the complainant is entitled to claim on non standard basis.  In the case cited above also, the driver of the vehicle was not having a valid and effective driving licence.  This view of the Hon'ble National Commission has been upheld by the Hon'ble Supreme Court in the case Amalendu Sahoo Vs. Oriental Insurance Co. Ltd.-2010(4) SCC 536.

13.                       In these circumstances, to our mind, in view of the guidelines mentioned above, the complainant is entitled to 75% of the loss assessed by the surveyor.  So the act of the opposite parties in repudiating the claim is against the principles of law settled by the Hon’ble Supreme Court. Hence the same amounts to deficiency in service.

14.                       In view of the above discussion we are of the opinion that the present complaint is allowed and the opposite parties are directed as under :-

i)                   to pay 75% of the amount as assessed by the surveyor.

ii)                To pay Rs.20,000/- as compensation for mental agony and harassment.

iii)              To pay Rs.10,000/- as litigation expenses.

15.                       This order be complied with by the opposite parties, within 45 days from the date of receipt of its certified copy, failing which the amounts at Sr.No.(i) & (ii) shall carry interest @18% per annum from the date of filing of this complaint till actual payment, besides payment of litigation costs.

16.                       Certified copy of this order be communicated to the parties, free of charge. After compliance file be consigned to record room.

Announced

28.1.2013.

Sd/-

(LAKSHMAN SHARMA)

PRESIDENT

Sd/-

 (MADHU MUTNEJA)

MEMBER

Sd/-

(JASWINDER SINGH SIDHU)

MEMBER