Delhi

North East

CC/378/2015

Om Veer Singh - Complainant(s)

Versus

The New India Assurance Co. - Opp.Party(s)

18 Mar 2020

ORDER

 DISTRICT CONSUMER DISPUTES REDRESSAL FORUM: NORTH-EAST

GOVT. OF NCT OF DELHI

D.C. OFFICE COMPLEX, BUNKAR VIHAR, NAND NAGRI, DELHI-93

 

Complaint Case No.  378/15

 

In the matter of:

		Om Veer Singh S/o Late Sh. Netra Pal Singh R/o- C/o Baldev Raj 864-E, Lohiya Gali No. 4 East Babarpur, Shahdara Delhi-110032.		Complainant
		Versus
		New India Assurance Co. Ltd Delhi Regional office- II, Scope Minar 10th Floor, Core-I, Laxmi Nagar District Centre- Delhi-110092.		Opposite Party
			DATE OF INSTITUTION:         JUDGMENT RESERVED ON:               DATE OF DECISION      :		01.10.2015 18.03.2020 18.03.2020

 

N.K. Sharma, President

Ms. Sonica Mehrotra, Member

 

Order passed by Ms. Sonica Mehrotra, Member

 

ORDER

1. Facts germane as culled out in the present complaint are that the complainant had purchased a TATA Motor / LPT 1109-EX2 Commercial Vehicle (A-Goods Carrying) Truck bearing registration No. HR-74-2271 2009 model and got the same insured with  OP vide Commercial Vehicle Package Policy (CVPP) bearing No. 32030531140100000086 w.e.f. 14.02.2015 to 13.02.2016 for an IDV of Rs. 4,80,000/- on payment of premium of Rs. 20,637/-  made to OP. One Baldev Raj who was dealing in wholesale Eggs Business had taken the subject vehicle from the complainant for carrying Eggs from Haryana and Punjab and his driver had parked the subject vehicle on 19.02.2015 at 11:00 PM near his godown in front of Bus Terminal Located opposite Babarpur, Delhi. However, the next morning at about 5:00 AM when Baldev Raj alongwith his driver went to the area where the vehicle was parked to send the vehicle to Haryana, they did not find the subject vehicle in the parked area. Baldev Raj immediately called up the PCR on 100 number at 6:00 AM on 20.02.2015. Accordingly FIR No. 105/2015 under Section 379 was registered with PS Welcome, Delhi on 25.02.2015. Baldev Raj immediately gave theft intimation to OP and as per direction of OP’s Branch Manager, complainant submitted the requisite documents viz claim form, FIR etc and also gave due intimation to the concerned authorities viz NCRB, MLO / RTO through the concerned / dealing police station. The subject vehicle could not be traced and untraced report by the concerned P.S. was filed on 25.05.2015 in the court of MM Shahdara, Delhi and statement of Baldev Raj was also recorded. The complainant submitted the said documents as well with OP’s office in completion of all paper work formalities required for processing of theft claim. However, instead of settling the claim, OP vide Repudiation Letter dated 04.08.2015 rejected the theft claim on flimsy grounds and that too after almost six months since theft. The complainant therefore got a legal notice dated 25.08.2015 served upon OP through his counsel but to no avail. As a last resort, complainant filed the present complaint before this Forum alleging deficiency of service and unfair trade practice on the part of OP for declining his genuine claim and prayed for issuance of directions against OP to pay the IDV amount of Rs. 4,80,000/- with interest @18% p.a. alongwith compensation of Rs. 10,000/- for harassment and Rs. 5,000/- towards litigation charges.

Complainant has attached copy of police schedule cum certificate of insurance for CVPP availed of from OP, copy of PCR called details about theft intimation given by Baldev Raj on 20.02.2015 at 6:17 AM, copy of FIR No. 105/2015 dated 25.02.2015 under Section 379 IPC, copy of intimation letter dated 13.03.2015 to District Transport Authority Nuh, Mewat, Haryana, copy of intimation dated 13.03.2015 to NCRB by concerned SHO welcome, Delhi about theft intimation, copy of untraced report dated 15.05.2015, copy of order dated 22.05.2015 by MM Karkardoma Courts about confirming untraced and closure of case file on statement of complainant Baldev Raj and owner of the case property (complainant herein) duly indentified by I.O., copy of statement of Baldev Raj and complainant about no objection to the untraced report, copy of repudiation letter dated 04.08.2015 by OP to the complainant and copy of legal notice dated 25.08.2015 by complainant’s counsel to OP alongwith postal receipts and tracking report of proof of delivery.

2. Notice was issued to the OP on 29.10.2015. OP entered appearance and filed written statement on 08.03.2016 vide which it took the preliminary objection that the complaint was not maintainable and liable to be dismissed as complainant had no Insurable Interest in the subject vehicle on the date of loss since Baldev Raj was the actual owner of the vehicle bearing No. HR-74-2271 on the date of alleged loss/ theft. In this regard OP relied upon statements of Sukhvinder Singh, Driver of Baldev Raj and Baldev Raj himself both statements having got recorded on 14.03.2015 by Royal Associates, Investigating and Detective Agency appointed by OP in which statements, it was revealed that none of the documents pertaining to the subject vehicle were available with complainant but were provided by Baldev Raj who also assured OP’s investigator to provide all documents relating to the theft which clearly showed that the subject vehicle was owned by Baldev Raj who did not get the RC as well as insurance transferred in his name. OP resisted the complaint on ground that the vehicle was purchased for commercial purpose and not for earning livelihood and therefore complainant was not  a consumer within the meaning of Section 2(1)(d) of Consumer Protection Act (CPA)  and the policy insurance was also taken for the commercial vehicle. OP took the objection of complaint being defective due to non-joinder of M/s Shriram Transport Finance Co. Ltd with which the subject vehicle was hypothecated since complainant had availed of vehicle loan from the said company which being a pledgee was a necessary party as per IMT-7 and as per complainant himself he had not obtained the NOC yet from the said finance company. OP alleged that the complainant as well as the subsequent purchaser Baldev Raj had not given immediate intimation of theft to OP in writing but informed it on 23.02.2015 after a delay of 4 days as was admitted by Baldev Raj himself and even FIR was lodged on 25.02.2015 after a delay of 7 days. Therefore complainant had violated policy condition No. 1 requiring immediate notice in writing upon occurrence of any accidental loss or damage of insured vehicle to OP. OP relied upon statement of Baldev Raj and his driver to fortify its ground of rejection of theft claim and alleged collusion Baldev Raj and complainant. Lastly, OP placed  reliance upon statement of Deepak Gupta neighbour of Baldev Raj and Baldev Raj himself dated 14.03.2015 wherein Baldev Raj called the subject vehicle ‘his own’ and his neighbour too claim that the subject vehicle belongs to him. For the defence so taken in view of discrepancies and disputed ownership,  OP repudiated the claim of the complainant vide letter dated 04.08.2015 though admitted the factum of insurance cover having been extended to the complainant qua the subject vehicle for the relevant period. For the defence so taken OP prayed for dismissal of the complaint. OP has attached copy of statements of Sukhvinder Singh (driver of Baldev Raj), Baldev Raj and complainant recorded on 14.03.2015, copy of investigation report dated 22.04.2015 issued by Royal Associates, copy of documents check list signed by Baldev Raj against signature of insured and statement given in vernacular undertaking to send his vehicle’s pending papers to OP’s office by 24.03.2015, copy of CVPP terms and condition highlighting conditions No. 1 alongwith policy schedule, copy of statement of Deepak Gupta (neighbour of Baldev Raj) dated 14.03.2015 and copy of repudiation letter dated 04.08.2015.
3. Rejoinder in rebuttal to the defense taken by OP was filed by complainant wherein the complainant submitted that the OP has admitted the factum of insurance as well as theft of the insured vehicle. Complainant submitted that he was the insured in whose favour OP had issued the insurance certificate with respect to the subject vehicle and therefore he had Insurable Interest qua the subject vehicle. Complainant placed reliance upon Circular No. IRDA/HLTH/MISC/CIR/216/09/2001 dated 20.09.2011 issued by IRDA whereby insurance companies were advised not to repudiate genuine claims on whimsical and baseless grounds and alleged that OP ignored the said circular in as much as despite complainant being the registered and actual owner of the vehicle in question to whom the letter of repudiation was addressed by OP, OP rejected the claim. Complainant submitted that whether the documents related to the vehicle remained inside the vehicle or were taken out by the driver of Baldev Raj did not make Baldev Raj the owner of the vehicle. Complainant objected to arbitrary, illegal, mechanical repudiation of his genuine claim by OP against the spirit of IRDA circular. Complainant submitted that the loan amount was paid of to Shriram Finance Company and therefore was not made a party and this fact was already made known to the investigator of OP. Lastly complainant submitted that he had given timely intimation of theft to OP’s branch Manager who then asked the complainant to furnish the claim form , FIR policy etc  and therefore was neither any violation nor any delay in either lodging the claim or FIR with respect to the theft of the insured vehicle and therefore complainant prayed for relief claimed.

Complainant has attached copy of IRDA Circular dated 20.09.2011.

4. Evidence by way of affidavit was filed by complainant exhibiting the documents relied upon as Ex-CW1/A to CW1/H.  Additional documents were filed by the complainant in the nature of copy of Driving Licence, copy of National permit issued by transport department Haryana, copy of  certificate of fitness and copy of NOC dated 13.03.2015 issued by M/s Shriram transport Finance Co Ltd all addressed and in the name of complainant.
5. Evidence by way of affidavit was filed by OP sworn by its AO exhibiting the documents relied upon as Ex-RW1/A to RW1/H. 
6. Written arguments were filed by both parties in reassertion / reiteration of their respective grievance/ defence.
7. During the course of oral arguments in proceedings held on 14.10.2019, complainant admitted that while he was the owner and the insured qua the subject vehicle, he had given the subject vehicle on Hire to Baldev Raj for running his Eggs transport business on the said vehicle.  OP sought time to explore possibility of settlement in the said case on non standard basis on the lines of landmark judgment of Hon'ble Supreme Court in Amalendu Sahu and Nitin Khandenwal case. However, the settlement could not come through and matter was heard in finality and reserved for order.  
8. We have heard the arguments addressed by both sides and have keenly perused the documentary evidence placed on record by both sides.

It is not in dispute that the complainant had taken Commercial Vehicle Package Policy with OP nor is it in dispute that the theft of the so insured vehicle took place during the subsistence of the policy. Therefore, the policy was valid on the date of theft and theft was also admitted. What is disputed by OP is the Insurable Interest of the complainant qua the subject vehicle which the OP has claimed / alleged to be not accruing in favor of the complainant on grounds that Baldev Raj was the actual owner of the subject vehicle, though no payment / sale consideration / proof of sale was proved by OP. Nonetheless, OP alleging violation of the terms of the insurance policy justified it being well within its right to repudiate the theft claim.

The question of importance / relevance arising in the present case is whether the alleged breach of terms and conditions of insurable interest as alleged by OP and subject vehicle given on hire as admitted by the complainant were so fundamental a breach so as to afford ground to the insurer to eschew its liability altogether. Ancillary to the question is the poser: whether the terms of the policy of insurance need to be construed strictly or be read down to advance the main purpose of the contract as viewed by Hon'ble Supreme Court in Skandia Insurance Co. Ltd Vs Kokilaben Chandravadan and Ors. 1987 (2) SCC 654.

9. On thorough perusal of the documents placed before us, we observed that OP has placed heavy reliance upon statements of Baldev Raj and his driver Sukhvinder Singh to buttress its assertion of complainant not being the owner of the subject vehicle. On revisiting the statements of both, we observed that the driver was running the subject vehicle for Baldev Raj on monthly salary since last eight to ten months prior to March 2015 (date of recording of statement) and considered Baldev Raj to be the owner of the subject vehicle though he has admitted that he had taken the subject vehicle on 19.02.2015 to Nuh, Mewat for getting the fitness renewed which as we have observed from the certificate placed on record was in the name of the complainant. The statement is written in Hindi but signed in Punjabi. The statement of Baldev Raj reveal that the complainant was staying on rent and was in driver profession for the last fifteen years or so at the time the statement was recorded (March 2015) and he had purchased the subject vehicle in 2009 for running Eggs wholesale business and due to complainant’s ill health, he had given the subject vehicle to Baldev Raj who had then kept his driver to drive the same and had sent him for getting fitness, permit and insurance renewed, all of which documents are undisputedly in the name of the complainant. At the time of theft of the vehicle, Baldev Raj had given theft intimation to the police since the complainant was suffering from fever and had gone to his village. Baldev Raj submitted that he had original documents of the subject vehicle in his possession and had one original key given to him by the complainant. Baldev Raj submitted that he was taking general care and maintenance of the subject vehicle. Nowhere in the entire statement, Baldev Raj claimed to be the owner of the subject vehicle. The statement of the complainant made to the investigator of OP reveals that he had purchased the subject vehicle as a second hand model in 2011 on finance availed from Shriram Transport Finance Co. Ltd and had taken national Permit for the said vehicle and was driving it with Baldev Raj but at the time of theft, Baldev Raj had kept his driver for running the same for Eggs business. Complainant submitted that he was informed about the factum of theft of subject vehicle on 20.02.2015 by Baldev Raj with whom he had entrusted the subject vehicle for plying and Baldev Raj informed the complainant of theft of his (complainant’s) vehicle from Babarpur Terminal Delhi. Therefore, in sync with the statement of the complainant made before the surveyor of OP, the complainant admitted before this Forum during the course of oral arguments that he had given the subject vehicle on hire to Baldev Raj for carrying his wholesale Eggs business but he had never claimed to have parted with the ownership of the subject vehicle in any of the documents placed on record and it is relevant to mention here that the Insurance Certificate, National Permit, Fitness Certificate and NOC are all in the name / addressed / with respect to the complainant and not Baldev Raj. OP has been unable to place on record any cogent proof of sale or transfer of the subject vehicle made by the complainant in favour of Baldev Raj as made out by OP. In this context the statement of I.O. Head Constable Shiv Kumar from PS Welcome, Delhi (before which the FIR of theft of the subject vehicle was lodged) made before the Ld. MM, Karkardooma Courts on 22.05.2015 is relevant as he recognized / identified Baldev Raj as the person who had lodged the theft complaint qua the subject vehicle and complainant as the owner of the case property i.e. the subject vehicle. Therefore in our considered view, OP has rejected the theft claim on conjecture and surmises without any conclusive evidence to establish ownership of Baldev Raj and dispute that of the complainant qua the subject insured vehicle. On the other hand, the complainant has himself admitted to have given the subject vehicle on hire to Baldev Raj which the OP has failed to rebut or establish to the contrary. In Skandia (Supra) judgment Hon'ble Supreme Court observed as follows:  

When the option is between opting for a view which will relieve the distress and misery of the victims of accidents or their dependants on the one hand and the equally plausible view which will reduce the profitability of the insurer in regard to the occupational hazard undertaken by him by way of business activity, there is hardly any choice. The court cannot but opt for the former view. Even if one were to make a strictly doctrinaire approach, the very same conclusion would emerge in obeisance to the doctrine of ‘reading down’ the exclusion clause in the light of the ‘main purpose’ of the provision so that the ‘exclusion clause’ highlighted earlier. The effort must be to harmonize the two instead of allowing the exclusion clause to snipe successfully at the main purpose.

 

10.  Therefore following the view taken by Hon'ble Supreme Court in the subject case, exclusion terms / policy violation must be read down so as to serve the main purpose of the policy i.e. indemnification of the loss. We are guided in our view taking note of judgment of Hon'ble Supreme Court in B V Nagaraju Vs M/s Oriental Insurance Co. Ltd 1996 SCC (5) 71. We further placed reliance upon landmark judgment of Hon'ble Supreme Court in National Insurance Co. Ltd Vs Nitin Khandelwal in Civil Appeal No. 3409/2008 passed on 08.05.2008 where in case of theft of Private vehicle being used as taxi, the Hon'ble Supreme Court while upholding the judgment of Hon'ble National Commission which confirmed the judgment of Hon’ble SCDRC granting 75% of sum insured on non standard basis , held that in case of theft of vehicle, breach of condition is not germane and insurance company is liable to indemnify the owner of the vehicle on non standard basis when the insured has obtained comprehensive policy for the loss caused  and cannot repudiate the claim in toto and as per settled legal position, the insured is required to be indemnified by the insurance company. The Hon'ble Supreme Court in Amalendu Sahu Vs Oriental Insurance Co. Ltd in Civil Appeal No. 2703 of 2010 decided on 25.03.2010 held in a case of a private vehicle given on hire in violation of policy terms and conditions that as per the clear guidelines laid down by Hon'ble National Commission in case of New India Assurance Co. Ltd Vs Narayan Prasad Appaprasad Pathak (2006) CPJ 144 (NC) which warranted claim settled on non standard basis for breach of policy terms and conditions including limitation as to use upto 75% of admissible claim and also the stand taken by Hon'ble National Commission in United India Insurance Co. Ltd Vs Gian Singh (2006) CTJ 221 (CP) (NCDRC) in which Hon'ble National Commission 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 standard basis. In the recent judgment of Hon'ble Supreme Court in the matter of Manjeet Singh Vs National Insurance Co. Ltd (2018) CPJ 1 (SC) it was observed that the insurance company has not only to establish its defence for the policy having been breached but must also show that breach of the policy is so fundamental in nature that it breaks the contract to an end and held that in such cases, breach of policy be treated on non standard basis @ upto 75%. Applying the afore cited ratio to the present case as squarely applicable, the OP clearly failed to establish its stand of no insurable interest by way of any cogent documents or evidence. On the other hand the complainant has himself admitted to have given the subject vehicle on hire. The other defence taken by OP about vehicle and vehicle policy being commercial in nature, the matter has already being settled by Hon'ble National Commission in M/s Harsolia Motors Vs National Insurance Co. Ltd I (2005) CPJ 27 (NC) = 2005 (1) CPR 1 (NC), in which Hon'ble National Commission had held in the present case taken insurance policy by commercial units was only for indemnification and actual loss and not intended to generate profit and therefore such service was not for commercial purpose. In so far as defence taken by OP of delay in intimation or FIR is concerned, on merits both are falsified and even otherwise this defence/ ground was not taken by OP in its repudiation letter dated 04.08.2015 and therefore is hit by the ruling of Hon'ble Supreme Court in Para 12 of Galada Power and Telecommunication Ltd. Vs United India Insurance Co. Ltd. in CA No. 8884-8900/2010 decided on 28.07.2016 judgment and not being entertained / considered in defence.
11.  Therefore after due appreciation of the facts of the case and the exhaustive legal discourse of the law settled for indemnification of loss in the event of violation of policy terms and condition in cases of theft, we hold OP guilty of deficiency of service for having wrongfully repudiated the genuine theft claim of the complainant on baseless ground of insurable interest and in view of complainant’s admission of having giving the subject vehicle on hire of Baldev Raj, we direct OP to pay the complainant 75% of the IDV amount of Rs. 4,80,000/- which is Rs. 3,60,000/- on non standard basis. We also direct OP to pay compensation of Rs. 10,000/- to the complainant  towards harassment and mental agony inclusive of litigation charges. Let the order be complied with by OP within 30 days from the date of receipt of copy of this order. 
12. Let the copy of this order be sent to both parties free of cost as per Regulation 21 (1) of Consumer Protection Regulation 2005.
13.  File be consigned to record room.

 

14.  Announced on  18.03.2020.

 

 

(N.K. Sharma)     President

(Sonica Mehrotra)  Member