BEFORE THE A.P.STATE CONSUMER DISPUTES REDRESSAL COMMISSION:HYDERABAD.
C.C.No.23 OF 2010,
Between:
Chalasani Ramesh, S/o.Krishna Rao,
Aged about 52 years, Indian,
Occ:Transport Business,
R/o.D.No.10-2-17, Putchala Street,
Near Old Bus Stand Road,
Vizianagaram-531 201.
Permanent Resident of
D.No.36-11-4, 1st Lane,
Santhinagar, Moghalrajapuram,
Vijayawada-520 010.
Krishna District. …Complainant
AND
United India Insurance Co.Ltd.,
Divisional Office No.1,
III Floor, Door No.1-7-21/1D,
Ramalaya Building, Sarojini Devi Road,
Secunderabad-500 003.
Rep. by its Senior Divisional Manager.
. …Opposite Party
Counsel for the Complainant M/s.V.Gouri Sankara Rao
Counsel for the Opposite Party Mr.S.Shravan Kumar
QUORUM:SRI R.LAKSHMI NARASIMHA RAO, HON’BLE MEMBER
AND
SRI T.ASHOK KUMAR, HON’BLE MEMBER
MONDAY, THE TWENTY FIRST DAY OF NOVEMBER,
TWO THOUSAND ELEVEN
Oral Order:(Per Sri R.Lakshmi Narasimha Rao, Hon’ble Member.)
***
1. The complaint is filed under section 17(a)(i) of the Consumer Protection Act seeking direction to the United India Insurance Commpany Ltd for payment of a sum of Rs.30,00,000/- towards the sum assured under the insurance policy along with interest @12%p.. and Rs.1,00,000/- towards compensation and an amount of Rs.25,000/- towards costs.
2. The averments of the complaints are that the complainant is the owner of Volvo B-7R Bus bearing registration number AP35U 0555 and he had obtained Passenger Carrying Commercial Vehicle insurance policy bearing no.050100/31/06/01/00000968 from the opposite party company for his vehicle for the period from 29.12.2006 to 28.12.2007 by paying premium of Rs.68,579/.The vehicle met with an accident on 30-12-2006 at Amboli village in Maharashtra while proceeding with passengers from Sholapur to Pune on 5.6.2007 and a case was registered by the police Mahol in Cr.No415 of 2006. The complainant intimated the opposite party about the accident and the opposite party insurance company deputed a surveyor to assess the loss caused to the Bus. The complainant submitted claim with an estimate of repairing charges to the tune of Rs.23,48,700.50/- for the repair of chasis, engine and other mechanical parts issued by M/s Lathangi Automobile Pvt.Ltd, Bangalore and repair estimate dated 5-01-2007 for Rs.15,42,382.88/-/-for repair of the bus body and estimate dated 5-01-2007 for Rs.4,94,948/- issued by M/s General Tyres, Bangalore towards air conditioning of the bus and an estimate for Rs.1,11,500/- for repair of the tyres issued by M/s General Tyres, Bangalore.
3. The regional office of the opposite party company at the first instance accepted to settle the claim for Rs.30,00,000/-. The complainant had submitted representation dated 25-08-2008 accepting for settlement of the claim for Rs.30,00,000/- to the regional office of the opposite party company subject to keeping the wreck with himself. There was no further information from the opposite party or its regional office. The complainant obtained loan from ICICI bank to purchase the vehicle and he had cleared the loan though the claim was not settled. On 9-03-2008 the ICICI Bank had issued no objection certificate to the Regional Transport Office informing that the loan agreement was terminated and requested the RTA to delete the hypothecation endorsement from the certificate of registration.
4. The opposite party company repudiated the claim on 16-10-2009 on the ground that at the time of the accident the vehicle was used as “stage carriage” and not as “contract carriage” and the passengers were traveling in the bus independently for their private purpose. Even if the vehicle is used as stage carriage instead of contract carriage virtually there would be no difference regarding the occurrence of the accident and claim for compensation. The passengers had not contributed for the cause of the accident. The repudiation of the claim amounts to unfair trade practice and deficiency in service.
5. The opposite party company resisted the claim contending that on receipt of information the opposite party deputed surveyor for conducting spot survey. The surveyor visited the spot and took photographs and also noted down the particulars of the loss and damage and submitted his report to the opposite party on 2-01-2007. The complainant submitted estimation dated 5-01-2007 for Rs.15,42,382/- from Azad Coach Builders,Bangalore and another estimation dated 10-01-2007 for Rs.20,80,341/- for Rs.20,80,341/- obtained from Lathangi Automobiles Pvt Ltd.The opposite party got conducted final survey through its surveyor who vistited Azad Coach Builders on 17-01-2007 where the vehicle was kept for the repairs, re-inspected the repaired vehicle and noted the particulars and submitted his report assessing the loss on repair basis at Rs.34,20,956.57 and liability on total loss basis with R.C.at Rs.29,98,500/- and liability on salvage basis with RC after deducting realizable salvage value atRs.19,98,500 and suggested salvage loss basis with RC of Rs.19,98,500.
6. The surveyor has stated clearly that the claim was discussed with the representatives of the insured in presence of the official of the Regional Office. The surveyor informed the opposite party that the insured is not interested to repair the vehicle and requested for settlement of claim on total loss basis and to retain the wreck. The complainant had given consent letter to the surveyor. The regional office of the opposite party at Bangalore is not empowered to settle the claim nor authorized to do so. The opposite party appointed investigator and the investigation revealed that the vehicle was being used as stage carrier instead of contract carriage which is violation of the conditions of the insurance policy. The seating capacity of the vehicle as per the registration certificate and the permit is only 13 i.e. twelve passengers and one driver. As per the permit the vehicle is permitted to be used only as contract carriage. According to limitations to use, the policy covers use only under a permit within the meaning of provisions of the M.V.Act. The injured passengers and the legal representatives of the deceased passengers filed claims before the Motor Vehciles Accdietn Claims Tribunal ,Hyderabad. The claim petitions and the FIR. Panchanama etc are the evidence to show that the bus was plying in contravention of the permit which is clear violation of the conditions of the policy. The complainant did not lodge any protest when the claim was repudiated. The repudiation of the claim is perfectly valid, justified and it is based on application of mind.
7. The complainant has filed his affidavit in support of his claim and he has also filed the documents marked as Exs.A1 to A23. On behalf of the opposite party insurance company its deputy manager, R.Sandhya has filed her affidavit and the documents Exs.B1 to B15.
8. The point for consideration is whether the opposite party insurance company is liable to pay any amount to the complainant?
9. The complainant’s ownership of the vehicle, Vovlo B-7R Bus and its insurance coverage under the insurance policy have not been in dispute between the parties. The accident that occurred on 30.12.2006 while the vehicle was proceeding from Hyderabad to Mumbai and the vehicle sustaining damage in the accident are also not in dispute between the parties to the proceedings. The insured declared value as mentioned in the insurance policy is `2,85,000/- whereas the complainant had submitted claim for an amount of `4,75,000/-. Within precincts of the insured declared value, the complainant’s claim has to be considered in the backdrop of the terms and conditions that are binding on him.
10. 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 FIR and statement of the persons who were traveling in the Bus establish the accident occurred when the vehicle was proceeding from Sholapur to Pune and driven in rash and negligent manner dashed to a sidewall by the side of the road and it turned turtle. The manner in which the accident occurred show that the vehicle was proceeding at high speed and the driver lost control over the steering of the vehicle. In all there were 13 persons in the vehicle of who sustained injuries and some of them died.
11. The FIR and Statement of the witnesses who are traveling in the bus at the time of the accident are filed by the opposite party company in support of its contention that the insured vehicle was being used as contract carriage in violation of the terms and conditions of the permit and the insurance policy. The complainant has not denied nor he can denies the documents which establish violation of the afore mentioned condition of the insurance policy as also that of the permit.
12. The Regional Office at Bangalore of the opposite party company and the surveyor held negotiations with the complainant. The complainant has stated that the regional office accepted for settlement of the claim for Rs.30,00,000/-. The learned counsel for the opposite party company has contended that the regional office at Bangalore has no authority to hold negotiations for settlement of the claim. The complainant has stated that he presented representation on 25-8-2008 when there was no response for the negotiations. A perusal of the letter addressed to the regional office of the opposite party company goes to show that negotiations were held for settlement of the claim on total loss basis for a sum of Rs.30,00,000/-. However, in absence of any response to the letter, it cannot be accepted that the regional office of the opposite party insurance company agreed to settle the claim with revised IDV on total loss basis for a sum of Rs.30,00,000/-. At the most the letter would lend support to the plea of the regional office at Bangalore of the opposite party holding negotiations with the complainant for settlement of the claim. The opposite party insurance company has not come forward to show that the regional office at Bangalore has no authority to hold negotiations with the complainant. The regional office of the opposite party holding the negotiations with the complainant for settlement of the claim has minimized the effect of violation of the conditions of the insurance policy.
13. The learned counsel for the opposite party has relied upon the decisions of the Supreme Court in “Oriental Insurance Co.Ltd., Vs Sony Cheriyan” [1999] INSC 283 and of the National Commission in “United India Insurance Co. Ltd., Dharm Raj” :IV (2005) CPJ 115.
14. In Sony Cherian’s case, the insured truck while carrying 15 barrels of Ether Solvent, it caught fire at Bisakoppa near Hooblie in Karnataka. The District Forum dismissed the complaint where as the State Commission of Kerla allowed the appeal preferred by the insured and the National Commission dismissed the revision filed by the insurance company. The matter was carried to the Supreme Court by the insurance company by filing appeal against the order of the National Commission. The Supreme Court dealt with the clause in the insurance policy under the heading “LIMITATIONS AS TO USE”. The Apex Court held “A motor vehicle cannot be used as a transport vehicle either by the state transport authority or the regional transport authority or any other authority concerned.”
15. The Supreme Court has considered the aspect of control of transport vehicles and the imposing of conditions by the transport authority while granting permit. Ether Solvent which was being carried in the insured truck was had to be a hazardous chemical not covered by the mandate of the permit.
16. Dharm Raj’s case was a case where the vehicle plying without permit in violation of Section 66 of the Motor Vehicles Act and met with an accident. The National Commission relying upon the decision of the Supreme Court in Sony Cheriyan’s case held that Section 66 of the Motor Vehicles Act creates a total bar on use of a vehicle in any public place whether a passenger carrying vehicle or a goods carriage unless the owner thereof holds permit within the meaning of Sec 2 (31) of the Motor Vehicles Act.
17. It is true that both the afore mentioned decisions laid down the principle that a passenger carrying vehicle or a goods vehicle cannot be plied without the owner thereof obtaining permit. There is no quarrel in regard to the usage of the insured vehicle being confined to the terms of the permit. Naturally any violation of the permit would amount to violation of the terms of the insurance policy. In such case the respondent is not entitled to any amount under the insurance policy. However, the position is some what relaxed by the decision of the Supreme Court in Amalendu Sahu Vs. Oriental Insurance Co.Ltd. (2010) 4 SCC 536 on which the learned counsel for the complainant has placed reliance.
18. In Amalendu Sahu’s case the Supreme Court held:
“In the first instance, we feel that the State Commission should have given a speaking order discussing the judgment of the Supreme Court on which it has relied and its applicability to the present case, instead of merely mentioning it without even giving the necessary citation. On the other hand, 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.”
19. 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.
20. In the light of the aforementioned decision the opposite party insurance company has to settle the claim of the complainant on non-standard basis. The surveyor has assessed the damage caused to the insured vehicle at Rs.19,98,500/-. As per the decision of the Hon’ble Supreme Court, 75% of admissible claim has to be awarded. Three fourth of Rs.19,98,500/- is Rs.14,98,875/- to which the complainant is entitled to. The opposite party 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 opposite party 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 opposite party insurance company cannot be saddled with liability to pay interest on the amount.
21. In the result the complaint is allowed. The opposite party /insurance company directed to pay Rs.14,48,875/- together with costs of Rs.4,000/-. Time for compliance four weeks.
MEMBER
MEMBER
Dt.21.11.2011
APPENDIX OF EVIDENCE
EXHIBITS MARKED
For the complainant
Ex.A1: Letter dt.16-10-2009 addressed by O.P.to complainant with Repudiation cover.
Ex.A2: Letter dt.30-12-2006 claim intimation letter
Ex.A3: Passenger carrying commercial vehicle package policy
Ex.A4: Kaleswari Travels letter dt.25-8-08.
Ex.A5: Statement (Report)
Ex.A6: Panchanama &Hindi
Ex.A7: Certificate of Registration
Ex.A8: Form PC
Ex.A9: Temporary permit
Ex.A10: Driving License
Ex.A11: Form PT Temporary Permit
Ex.A12: Form 24, B-Register of Motor Vehicle
Ex.A13: Letter dt.9-3-2009 No objection letter issued by ICICI Bank, Mumbai.
Ex.A14: No objection for removal of Hypothecation letter issued by ICICI Bank dt.9-3-09.
Ex.A15: Tax Receipt dt.27-10-06.
Ex.A16: Form-38 Certificate of Fitness
Ex.A17: Receipt under B.M.V.Tax Act, 1958 dt.18-12-06.
Ex.A18: -do-
Ex.A19: Repair Estimate dt.5-1-2007
Ex.A20: Quotation of General Tyres dt.8-1-07
Ex.A21: Carrier Airconditioning & Refrigeration Ltd. Estate South dt.5-1-2007.
Ex.A22: Delivery note dt.4-8-09.
Ex.A23: Repairs of Estimation.
For opposite parties
Ex.B1: Claim form
Ex.B2: Final Survey Report
Ex.B3: Investigation Report
Ex.B4 B- Register extract of Motor Vehicle of complainant
Ex.B5: Extract of Temporary permit issued by RTA Vijayanagaram
Ex.B6: Final report of PS Mohol along with English Translation.
Ex.B7: Statement of Parag Balchandra Kavedhkar along with English Translation
Ex.B8: Statement of Dayanand Krishna Naik along with English Translation.
Ex.B9: Statement of Deenabandu Niranjan Rangale along with English Translation.
Ex.B10: Statement of Sanjay Prem Babu Goyal along with English Translation.
Ex.B11: Statement of Rajesh Resumal Mulyadani along with English Translation.
Ex.B12: Statement of Gourav Suresh Kumar Janward along with English Translation.
Ex.B13: Statement of Raja Basavate along with English Translation.
Ex.B14: Statement of Deepa Immaneul along with English Translation.
Ex.B15: repudiation letter dated 16.10.2009.
MEMBER
MEMBER
Dt.21.11.2011
*sg
