BEFORE A.P STATE CONSUMER DISPUTES REDRESSAL COMMISSION AT HYDERABAD
F.A.No.230 OF 2010 AGAINST C.C.NO.114 OF 2008 DISTRICT FORUM NIZAMABAD
Between:
The National Insurance Co., Ltd.,
rep. by its Branch Manager, Branch Office
H.No.5-8-799/2, B.Laxmirajam Complex,
Jawahar Road, Nizamabad
Appellant/opposite party
A N D
G.Narayana Reddy S/o Sambaiah
46 years, Sirikonda Village and Mandal
Nizamabad Dist. (Owner of Mahindra
MAX Jeep No.AP25U 5738)
Respondent/complainant
Counsel for the Appellants Sri V.Sambasiva Rao
Counsel for the Respondent P.Krishna Reddy
QUORUM: SRI R.LAKSHMINARASIMHA RAO, HON’BLE MEMBER
AND
SRI THOTA ASHOK KUMAR, HON’BLE MEMBER
TUESDAY THE EIGHT DAY OF NOVEMBER
TWO THOUSAND ELEVEN
Oral Order (As per Sri R.Lakshminarasimha Rao, Hon’ble Member)
***
1. The National Insurance Company Limited has filed the appeal challenging the order of the District Forum and contending that the District Forum failed to see that the insured vehicle was carrying 13 persons against permissible limit of six passengers including the driver and due to the overload of passengers the driver of the insured vehicle was unable to control the steering of the vehicle and while overtaking dashed to a vehicle from behind as a result of which the vehicle sustained damages and six of the persons traveling in the vehicle were injured.
2. The factual matrix of the case is that the respondent had obtained insurance policy bearing no.551302/31/06/6300000581 from the appellant company for his Mahendra Max Jeep bearing registration No.AP 25U 5731 for the period from 29.8.2006 to 28.8.2007. The vehicle met with an accident while proceeding from Nizamabad to Hyderabad with 12 passengers on 5.6.2007 and a case was registered by the police Toopran, Medak in Cr.No.155 of 2007. The respondent submitted claim with an estimate of repairing charges to the tune of Rs.4,75,000/-. The insured declared value of the vehicle in the insurance policy is `2,85,000/-. The appellant company had repudiated the claim on the premise of the respondent violating the terms of the insurance policy since the driver of the vehicle lost control over the steering of the vehicle due to the overload of the passenger.
3. The appellant company resisted the claim contending that the seating capacity of the vehicle as per the registration certificate and the permit is only six i.e., five passengers and one driver. At the time of the accident 12 persons were traveling in the vehicle and they were sitting in a cramped manner resulting the driver sitting at the edge of the seat and due to restricted moments of his legs and hands he had lost control over the steering of the vehicle and dashed from behind to the vehicle proceeding in front of the vehicle in question. The driver of the vehicle was not sent for medical examination nor did he sustain any injuries in the accident. The insured declared value of the vehicle is `2,85,000/-. The actual loss is payable on the actual age of the vehicle on the date of loss subject to deductions for depreciation, wear and tear as mentioned in the terms and conditions of the insurance policy. The respondent had not intimated the appellant company immediately after the accident was occurred.
4. The respondent has filed his affidavit in support of his claim and he has also filed the documents marked as Exs.A1 to A5. On behalf of the appellant insurance company its branch manager, Pulluri Swamy has filed his affidavit and the documents Exs.B1 to B8.
5. The District Forum has allowed the complaint on the premise that non-intimation of the accident within the stipulated time is not mandatory but directory in the light of decision of Tamil Nadu State Commission and overloading of the vehicle is not fundamental breach of contract in view of the judgment of the Supreme Court in B.V.Nagarjau Vs Oriental Insurance Co., Ltd., II CPJ 18 (SC),1997.
6. The point for consideration is whether the appellant insurance company is liable to pay any amount to the respondent?
7. The respondent’s ownership of the vehicle, Mahendra Max Jeep and its insurance coverage under the insurance policy have not been in dispute between the parties. The accident that occurred on 5.6.2007 while the vehicle was proceeding from Nizamabad to Hyderabad and the vehicle sustaining damages in the accident are also no longer in dispute between the parties to the proceedings. The insured declared value as mentioned in the insurance policy is `2,85,000/- whereas the respondent had submitted claim for an amount of `4,75,000/-. Within precincts of the insured declared value, the respondent’s claim has to be considered in the backdrop of the terms and conditions of the insurance policy that are binding on him.
8. The vehicle was carrying 13 persons on the fateful day when it met with an accident which resulted damage to the vehicle and injuries to six passengers who subsequently succumbed to the injuries. The accident occurred when the vehicle was proceeding at high speed and dashed from behind to the vehicle that was proceeding in front of it and the driver lost control over the steering of the vehicle. The vehicle was proceeding at high speed since the driver had to overtake the other vehicle. In all there were 13 persons in the vehicle which would manifest the scanty space occupied by the driver while driving the vehicle. The surveyor had observed in his report that the persons traveling in the vehicle at the time of the accident were sitting in so cramped manner that the driver had to sit on the edge of the seat whereby the movement of his hands and legs were restricted resulting the driver losing control over the steering and consequently in the occurrence of the accident. Therefore, we have no iota of doubt in holding that the respondent had violated the terms of the insurance policy by permitting double the number of persons to travel in the vehicle at the time of the accident.
9. The learned counsel for the respondent had relied upon the decisions of the Hon’ble Supreme Court in Amalendu Sahu Vs. Oriental Insurance Co.Ltd. (2010) 4 SCC 536 and that of the National Commission in 2006 (3) CPR 178 (NC) in National Insurance Co., Ltd., and Suresh Babu and another and II (2006) CPJ 144 (NC) in New India Assurance Co., Ltd., Vs Narayanprasad Appaprasad Pathak.
10. As per the judgment of the National Commission in New India Assurance Co. Ltd vs A Mohamad Yasin (14.08.1995) it was ruled that a settlement offer on non-standard basis cannot be the foundation for a direction against the insurance company for settlement of the claim or holding the insurance company guilty of any deficiency in service within the meaning of Consumer Protection Act. (para 4 of the order). Secondly, the National Commission, in its order dated 29th October 2007, in G Kothainachiar vs The Branch Manager, United India Insurance Co. Ltd., and Others has taken note of the policy framed by the General Insurance Corporation of India with regard to settlement of non-standard claims in case of breach of policy of terms and warranties and has confirmed that such settlements would essentially inter alia cover claims were the breaches are of a technical or minor and not serious breaches.
11. The learned counsel for the appellant has relied upon the decision in NIC Vs Suresh Babu, 2006 (3) CPR, 178 and the learned counsel for the respondent has relied upon the decision of the Supreme Court in Amalendu Sahoo Vs Oriental Insurance Company Limited, (2010) 4 Supreme Court Cases, 536.
12. In Suresh Babu’s case the National Commission held that the insurance company was justified in repudiating the claim when the driver of the insured vehicle permitted 36 passengers against the bus having capacity to carry 17 passengers plus one driver and one conductor and the driver of the insured vehicle had driven it recklessly at high speed which dashed from behind the vehicle which was parked on the road side. The National Commission held that the decision of the Supreme Court in B.V.Nagaraju Vs Oriental Insurance Company Limited had no bearing on the facts of the case because in B.V.Nagaraju’s case only 2 to 3 more passengers were carried in a goods vehicle.
13. In Amalendu Sahoo’s case, the Supreme Court approved the settlement of claim on non-standard basis in the matter like vehicle carrying passengers etc. The Supreme Court approved the decision of the National Commission in New India Assurance Company Limited Vs Narayan Prasad Appaprasad Pathak (2006) II CPJ 144 (NC) wherein the National Commission set out guidelines issued by the insurance company about settlement of non-standard claims.
14. In the light of the aforementioned decision the appellant insurance company has to settle the claim of the respondent on non-standard basis. The surveyor has assessed the damage caused to the insured vehicle at `1,94,000/-. As per the decision of the Hon’ble Supreme Court, 75% of admissible claim has to be awarded. Three fourth of `1,94,000/- is `1,45,500/- to which the complainant is entitled to. The appellant company can be fastened with liability to pay interest only in case where there is deficiency in service on its part in settlement of the claim. The appellant insurance company has deputed a surveyor immediately after receipt of the claim and repudiated the claim basing its reliance on the police records. In such circumstances, the appellant insurance company cannot be saddled with liability to pay interest on the amount. Accordingly, the appeal deserves to be allowed reducing the amount from `1,94,000/- to `1,45,500/- and by deleting relief relating to interest.
In the result the appeal is allowed. The order of the District Forum is modified. The appellant/insurance company directed to pay `1,45,500/- together with costs of `2,000/-. Time for compliance four weeks. The parties shall bear their own costs in the appeal.
MEMBER
MEMBER
Dt.08.11.2011
KMK*
