NATIONAL
CONSUMER DISPUTES REDRESSAL COMMISSION
REVISION PETITION NO.
2393 OF 2003
(from the order dated 8.4.03 in Appeal No.1286/02 of the
State Commission, M.P.)
Sanjay Shivhare
Respondent
REVISION PETITION NO.
2 OF 2004
(from the order dated 8.4.03 in Appeal No.1286/02 of the
State Commission, M.P.)
National
Insurance Co. Ltd.
Respondent
REVISION PETITION NO.
824 OF 2006
(from the order dated 4.1.06 in Appeal No.448/05 of the State
Commission, Chhattisgarh)
Jai Hind Yadav
Respondent
BEFORE :
HONBLE MR.JUSTICE M.B. SHAH,
PRESIDENT
MRS. RAJYALAKSHMI RAO,
MEMBER
MR. ANUPAM DASGUPTA, MEMBER
For the
Petitioner : Mr.Kishore Rawat, Advocate
(in R.P.2393/03) and
for the Respondent
(in R.P.2/2004)
For the
Respondent : Mr.A.K. Sanghi,
Advocate for
for the Petitioner
(in
R.P.2/2004)
For the petitioner : Mr.R.B. Shami,
Advocate
(in
R.P.824/2006)
For the Respondent : NEMO
(in R.P.824/2006)
13.09.2007
In these
Revision Petitions, question involved is in case of breach of the policy
condition as to limitation of use of the vehicle, whether the insured is
entitled to reimbursement on the basis of policy adopted by the insurance
companies of settling such claims on non-standard basis?
In our view,
the policy of the insurance companies, on the basis of the guidelines, is
required to be followed and adhered to.
In such cases, claims are required to be settled on non-standard basis.
For the
reasons recorded hereinafter, these Revision Petitions are disposed of by this
common judgement.
Being
aggrieved and dissatisfied by the judgement and order dated 8.4.2003 passed by
the State Consumer Disputes Redressal Commission, M.P., in Appeal No.1286/02,
the National Insurance Co. Ltd. (hereinafter referred to as the insurance
company) has preferred Revision Petition No.2393/2003 contending that the State
Commission, by its order dated 2.8.2002, erred in reversing the order passed by
the District Forum, Jabalpur, in Complaint Case
No.239/2000 and directing the insurance company to pay a sum of Rs.1,68,750/-
with interest at the rate of 6% p.a. from the date of filing of the complaint,
i.e. 18.9.2000 along with Rs.5,000/- as costs of proceedings by arriving at a
conclusion that the market value of the vehicle was Rs.2,25,000/- applying the
non-standard formula.
Against the
said judgement and order of the State Commission, the complainant has also
preferred Revision Petition No.2/2004 contending that the State Commission
ought to have taken into consideration the sum assured, i.e., Rs.3,50,000/- before passing the impugned order. It is also contended that there was no
evidence on record before the District Forum as well as the State Commission
that the vehicle (Tata Sumo), owned by the
complainant, was used for carrying passengers for hire or reward.
In the
present case, facts in brief are that the complainant was the owner of the
vehicle, which was insured with the National Insurance Co. Ltd. for the period
between 15.7.1998 and 14.7.1999. It is
contended by the complainant that the vehicle was robbed on 16.5.1999 enroute from
The State
Commission, relying upon the decision rendered by the Five Member Bench of this
Commission in the case of Kesarben Vs. United India
Insurance Co. Ltd. III (2000) CPJ 36 (NC) arrived at the conclusion that the
insurance company was required to settle the claim on non-standard basis as per
the prescribed guidelines and assessed the loss after taking into consideration
the surveyors report. Admittedly, the
surveyor assessed the market value of the vehicle at Rs.2,25,000/-
and deducted 25% from the said amount and has awarded Rs.1,68,750/-.
Before dealing with the contentions raised
by the learned counsel, Mr.Rawat, appearing for the
insurance company, we would first refer to the decision of this Commission in
the case of Kesarben (supra). In that case also, the alleged facts are
similar. It was contended that the car
was not supposed to be used for hire or reward.
This Commission also considered the finding recorded by the State
Commission that there was nothing on record to show that on the fateful day
when the driver was murdered and the car was stolen, the driver carried some
passengers in the car. The Commission
further held that even if it was argued that the brother of the deceased was
plying his brothers vehicle on certain occasions, no evidence has been
produced to establish that this was being done on regular basis with full
knowledge and connivance of the owner.
The Commission, thereafter, referred to the Guidelines for Settlement of
Non-standard Claims and the Formula for the same, which are as under :
GUIDELINES FOR SETTLEMENT OF NON-STANDARD CLAIMS
1) where a breach of warranty or policy condition (hereafter referred to as
breach) arises and where such breach is of a technical nature or
is evidently beyond the control or knowledge of the insured or is considered
after rectifying the policy and collecting additional premium where due. In settling the claim, a deduction may be
made from the assessed claim amount equivalent to the extra premium due for
three years or three times the additional premium due for voyage which would
have been charged had correct information been available originally.
2) Where the breach is material to the loss or where an
act of the insured or his agent has contributed to such a breach in such cases
if the insured has acted with the best of intentions and has not consciously
committed the breach or where the legal question of liability is in doubt,
payment may be considered on merits of each case, upto
a maximum of 75% of the assessed amount of loss.
where the breach is material to
the loss and the amount determined to be payable upto
the maximum of 75% of the assessed amount of loss is found to be higher
than what would be payable had the claim been dealt with as one where the
breach is of a technical nature, the compromise settlement should be made only
for the lower amount.
PROCEDURE
a) Additional premium for the unexpired period of the
risk for rectifying the breach should be collected separately on pro-rata basis
and credited to premium account.
b) The amount equivalent to 3 years difference in
premium or three times the additional premium due for the voyage or 25% of the
assessed loss as per guidelines be deducted from the claim amount as assessed
by the surveyor and the net amount of the claim paid to the claimant be debited
to the claim paid account. Please note
that unless additional premium for rectification of the policy for the
unexpired period as per (a) above is paid by the insured, the claim cheque need not be released
..
It is further laid down that :
The three types of claims which can
be settled as non-standard under the guidelines are set out hereunder
:
Non-Standard Claims
Following types of claims shall be considered as non-standard and shall be settled as indicated below after recording the reasons :
S.No. Description %age of settlement
i) Under
declaration of Deduct 3 years difference in
licensed carrying premium from the amount of
capacity. claim or deduce
25% of the
claim amount
whichever is
higher.
ii) Overloading of vehicles Pay claims not exceeding
beyond licensed carrying 75%
of admissible claim.
capacity.
iii) Any other breach of Pay upto 75% of
warranty/condition of admissible
claim.
policy including limitation
as to use.
Applying the
said non-standard formula, this Commission in the said case, directed the
insurance company to reimburse 75% of the loss suffered by the
complainant.
It is apparent that, on the basis of the
said decision, the State Commission allowed the Appeal filed by the
complainant.
Learned
counsel, Mr.Rawat, relied upon the decision of this
Commission rendered by Mr. K.S. Gupta, J., in the case of Jagdeesh
Singh Vs. United India Insurance Co. Ltd. III (2007) CPJ 160 (NC)
wherein it is observed that as the jeep was being used against the limitation
as to use, the repudiation of the claim was justified. In our view, the aforesaid judgement is
rendered because none has pointed out the guidelines prescribed for settling
the claim on non-standard basis nor the aforesaid judgement in the case of Kesarben (supra) was pointed out.
Further, the
learned counsel, Mr.Rawat, submitted that, on record,
there is an affidavit of the investigator to the effect that the vehicle was
used on regular basis for hire or reward.
He has also produced on record the additional evidence in support of his
contention which is an application filed by the wife of the deceased driver under
the Workmens Compensation Act.
In our view, it would be difficult to
accept the statement of the wife of the deceased driver in the application,
which is filed under the Workmens Compensation
Act. Because the complainant has
produced on record the affidavits of witnesses wherein it has been stated that
the complainant was using the vehicle for private purpose and that the vehicle
was not used for hire or reward, same way, the affidavit of the investigator
cannot be relied upon because of the affidavits of other witnesses.
Learned
counsel, Mr.Rawat, however, submitted that there is
flagrant violation of the terms of the policy because there is direct nexus of
murder of the driver of the vehicle by the passengers who had hired the
vehicle. In our view, there is no
evidence to substantiate the said contention of learned counsel, Mr.Rawat. It would
be difficult to say that the driver took the passengers for hire or reward and
those passengers murdered him. As such,
there is nothing on record as to what happened with regard to the Criminal Case
for the murder of the driver and how the murder took place. In any case, it would be difficult to arrive
at a conclusion that if the passengers commit murder of the driver, it would be
a flagrant violation of the term of the policy.
The breach of the terms of the policy is restricted only to its use as a
taxi or for hire or reward. Even in such
cases, the guidelines specifically provide that with regard to the user, if
there is a breach, it is not to be considered as flagrant violation otherwise
they would not have provided that in such cases 75% of the amount should be
paid.
Considering
the facts and the evidence, in our view, it would be difficult to arrive at a
conclusion that the vehicle was used for hiring purpose. The guidelines for settling the claim on
non-standard basis, which, inter alia, provides that
in case of any other breach of condition of policy, including limitation as to
use, was required to be adhered to by the insurance company.
In the
result, there is no substance in these Revision Petitions and, therefore, are
dismissed accordingly. There shall be no
order as to costs.
The amount
deposited by the insurance company with this Commission be
released to the complainant.
REVISION PETITION
NO. 824/2006
Similar
question is involved in this Revision Petition also. The only difference is that, in the present
case, it is admitted that, one Ranjit Singh, while he
was proceeding to
Against that
judgement, the insurance company preferred Appeal No.448 of 2005. But, as the Appeal was time-barred by 12
days, the same was dismissed as no sufficient cause was shown for condoning the
delay. In our view, the order passed by
the State Commission in not condoning the delay of 12 days cannot be
justified. In these set of
circumstances, we have heard the learned counsel for the petitioner on merits.
For the
reasons recorded above, in Revision Petitions No.2393/2003 and 2/2004, the
insurance company is required to settle the claim on non-standard basis as per
the guidelines quoted above.
In this view
of the matter, this Revision Petition is partly allowed. Impugned order passed by the District Forum
directing the insurance company to pay a sum of Rs.2,04,000/- is modified and
it is directed that the insurance company shall pay (75% of Rs.2,04,000/-)
Rs.1,53,000/- with interest as awarded by the District Forum. Rest of the order passed by the District
Forum is maintained.
Aforesaid
Revision Petitions stand disposed of accordingly. There shall be no order as to costs.
The Registrar
of this Commission is directed to send a copy of this order to the Insurance
Regulatory and Development Authority,
J.
(M.B.
SHAH)
PRESIDENT
(RAJYALAKSHMI
RAO)
MEMBER
(ANUPAM DASGUPTA)
/sra/ 18 (A,B), 19 /Court-1