BEFORE THE CONSUMER DISPUTES REDRESSAL FORUM, ERNAKULAM.

Date of filing : 20/06/2009

Date of Order : 26/07/2011

Present :-

Shri. A. Rajesh, President.

Shri. Paul Gomez, Member.

Smt. C.K. Lekhamma, Member.

C.C. No. 325/2009

Between

 

And

O R D E R

A. Rajesh, President.

1. The facts leading to this complaint are as follows :

The complainant was the registered owner of motor car bearing registration No. KL-45/5891. The vehicle was insured with the opposite party for the period from 23-10-2007 to 22-10-2008. The vehicle has a hypothecation agreement with the H.D.F.C. Bank, Trissur. The facts being so on 24-02-2008, the vehicle met with an accident and extensive damages were caused. The surveyor appointed by the opposite party reported that it is a total loss claim. However, the claim application submitted by the complainant was rejected by the opposite party by letter dated 25-08-2008 stating that at the time of the accident the driver had no badge to drive a commercial vehicle. As per the policy conditions, the complainant is entitled to get an amount of Rs. 5,36,000/- as reported by the surveyor. Hence this complaint.

2. Version of the opposite party :

This Forum has no territorial jurisdiction to entertain this complaint since the contract was concluded in Thrissur. The insured is a commercial vehicle and the driver employed by the complainant was not authorised to drive the insured vehicle. Therefore, the opposite party is not liable to pay any insurance claim to the complainant. As per the survey report, the loss assured on the basis of the salvage loss basis is only Rs. 4,60,500/- and not Rs. 5,36,000/- as claimed by the complainant. The opposite party has repudiated the claim after due application of mind and there is no deficiency in service on the part of the opposite party. The opposite party requests to dismiss the complaint.

3. The complainant and his witness were examined as PWs 1 and 2 respectively. Exts. A1 to A6 were marked on the side of the complainant. No oral evidence was adduced by the opposite party. Exts. B1 and B2 were marked on the side of the opposite party. Heard the counsel for the parties.

4. The points that came up for consideration are :-

1. Whether the complaint is maintainable in this Forum?

2. Whether the complainant is entitled to get insurance claim of Rs. 5,36,000/- from the opposite party?

5. Point No. i. :- Admittedly, the accident of the insured vehicle occurred at Edappally on 24-02-2008 which is within the territorial jurisdiction of this Forum. So, we hold that this complaint is maintainable in this Forum.

6. Point No. ii. :- The parties are in consensus on the following issues :

1. The vehicle bearing Registration No. KL-45/4891 was insured with the opposite party for the period from 23-10-2007 to 22-10-2008.

2. The insured vehicle was a taxi car.

3. The insured declared value of the vehicle was Rs. 5,36,000/-.

4. The vehicle met with an accident on 24-02-2008.

5. The surveyor has assessed the damages in Ext. B1 survey report dated 24-06-2008 at Rs. 4,60, 500/-.

6. The insurance claim was repudiated by the opposite party vide Ext. B2 letter dated 25-08-2008 stating that the driver was not holding badge to drive a commercial vehicle.

7. PW2, the driver of the vehicle was not holding badge at the time of the accident.

7. According to Sri. S.K. Balachandran the learned counsel for the complainant, the complainant is entitled to get the insured declared value of Rs. 5,36,000/- on the basis of Ext. B1 survey report. He relied on the following decisions rendered by the higher judiciary.

1. Sohanlal Passi Vs. P. Sesh Reddy and Others (AIR 1996 Supreme Court 2627).

2. National Insurance Co. Ltd. Vs. Swaran Singh (2004 (I) KLT 781 (SC).

3. Moidu. P.T. Vs. Oriental Insurance Co. Ltd. (2007 (4) ILR 790).

8. On the contrary, the learned counsel for the opposite party Sri. Rajan P. Kaliyath submitted that the parties to the contract are bound by the terms and conditions in the policy. He further stated that since the driver had no badge to drive a commercial vehicle, the opposite party is not liable to pay any insurance claim to the complainant. He relied on the decision rendered by the Hon'ble Apex Court in New India Assurance Co. Ltd. Vs. Prabhu Lal 1 (2008) ACC 54 (SC).

9. The ratio laid down in Sohanlal Passi Vs. P. Sesh Reddy and Others (AIR 1996 Supreme Court 2627), National Insurance Co. Ltd. Vs. Swaran Singh (2004 (I) KLT 781 (SC) and Moidu. P.T. Vs. Oriental Insurance Co. Ltd. (2007 (4) ILT 790) (cited by the complainant) does not apply to the instant case as they were in respect of 'third party insurance claims. However evidently, in this complaint, the complainant is seeking direction to pay insurance claim for the damages sustained to his vehicle from its insurer in this case the opposite party. The Hon'ble Supreme Court in New India Insurance Co.Ltd. Vs. Prabhu Lal (Supra) has observed that the insurance company cannot be held liable if the driver of a commercial vehicle did not possess valid licence to ply the same. However, the Hon'ble Supreme Court in Amalendu Sahoo Vs. Oriental Insurance Company Ltd. (2010 CTJ 485 (Supreme Court) held in para 14 and 15 as follows :

“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 claim 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:

________________________________________________________

Sl. No. Description Percentage of settlement___

(i) Under declaration Deduct 3 years'

of licensed difference in premium

carrying capacity. premium from the amount

of claim or deduct 25% of

claim amount, whichever

is higher.

(ii) Overloading of Pay claims not

vehicles beyond exceeding 75% of

licensed carrying admissible claim.

Capacity.

(iii) Any other breach Pay upto 75% of

of warranty/condition admissible claim.

of policy including

limitation as to use.

________________________________________________________

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.”

10. The Supreme Court has rightly concluded that though there is any breach of condition in the policy, the complainant should not be put to unnecessary prejudice or harassment. Undoubtedly, the complainant is a consumer whose realm has been breached. In view of the above in the instant case as well, the complainant is entitled to get 75% of the admitted amount of insurance claim from the opposite party based on Ext. B1 survey report only. The liberty to choose any one of the modes of settlement in Ext. B1 survey report will be that of the opposite party.

11. In the result, we partly allow the complaint and direct that the opposite party shall disburse the insurance claim of the complainant on non-standard basis in line with the above observation made by the Hon'ble Apex Court in Amalendu Sahoo Vs. Oriental Insurance Company Ltd. (Supra).

The order shall be complied with, within a period of one month from the date of receipt of a copy of this order, failing which the amount so calculated shall carry interest @ 12% p.a. till realisation.

Pronounced in open Forum on this the 26^th day of July 2011.