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
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
For the Respondent : Mr.A.K. Sanghi, Advocate for
for the Petitioner
For the petitioner : Mr.R.B. Shami, Advocate
For the Respondent : NEMO
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.
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.
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 :
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
ii) Overloading of vehicles Pay claims not exceeding
beyond licensed carrying 75% of admissible claim.
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
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.
of this Commission is directed to send a copy of this order to the Insurance
Regulatory and Development Authority,
/sra/ 18 (A,B), 19 /Court-1