AI Structured Summary
Not yet generated for this judgment
Judgment
RELEVANT facts for determination of the point involved in this Revision Petition are: Complainant/Petitioner purchased Mahindra Bolero manufactured by Mahindra & Mahindra Ltd., Respondent No.3, from Ravi Auto Ltd.-dealer, Respondent No.2 herein, and got it insured from the Oriental Insurance Company Ltd., Respondent No.1 herein (hereinafter to be referred to as ''Respondent ''), for a sum of Rs.5,41,750/- for the period from 11.02.02 to 10.02.03. On 24.05.02, Petitioner gave the vehicle to Dealer ''s workshop for service and repair. Om Prakash Chaudhary, Mechanic-Cum-Driver, took the vehicle for road trial and, while on road, the vehicle met with an accident and got badly damaged. Dealer lodged the report with the Police as well as informed the insurance company about the accident. Insurance Company appointed Mr. S. Mitra, Surveyor and Loss Assessor, who submitted his report on 02.08.02 assessing the loss at Rs.3,83,574/-. In the remarks column of his report, Surveyor reported as under:- "As per Policy terms and conditions the claim does not come under the purview of policy condition. As per the policy condition it is limited to use only for social, domestic and pleasure purpose and insured own business. It does not cover use for hire or reward, organized racing, speed testing/trial or carriage of goods (other than samples) in connection with any trade or business or use for any purpose in connection with Motor Trade ".
BASED on the report of the surveyor, the respondent-insurance company repudiated the claim by its letter dated Aug.28, 2002 on the ground that the vehicle at the time of accident was being used for speed testing which was excluded from the ''limitations as to the use '' clause printed in the schedule of the policy. As per policy condition the company was liable to reimburse the loss for the use of the vehicle only for social, domestic, pleasure purposes and insured ''s own business. Aggrieved by the letter of repudiation of the claim petitioner filed the complaint before the District Forum. District Forum allowed the complaint and directed the Respondent to pay the claim value of Rs.3,83,574.49/- to the Petitioner along with compensation of Rs.50,000/- and costs of Rs.2000/-. Respondent, being aggrieved, filed the appeal before the State Commission. State Commission allowed the appeal and set aside the order of the District Forum by observing as under:- "So far as the merits of the matter are concerned, in an unnecessarily lengthy judgment the Forum has dwelt upon the most important issue in a cryptic way. It has devoted its reasoning to only few lines at page 17 of the judgment where it has stated the policy condition. But it has remained conspicuously silent as to why such a condition would not pose a bar to the claim of the complainant on the ground that the accident occurring at the time of testing of a vehicle for the purpose of ascertaining its speed will not be covered under this policy. As per this condition of the policy agreement (vide the clause inserted in bold letters on the very first page of the policy agreement styled as clarification) any use of a vehicle for the purpose of speed testing or running in connection with any motor trade will not be covered by the policy. It is an established position in this case that at the time of accident the vehicle was in the custody of the authorized dealer namely Ravi Auto Ltd. (OP No.1) and it was being run at a high speed for purpose of trial ".
Petitioner, being aggrieved, has filed the present Revision Petition.
LEARNED counsel appearing for the Petitioner contends that from the perusal of the Policy and Section No.1 pertaining to the ''loss or damage '' and the "limitations as to use " clauses in the policy, it is abundantly clear that by no stretch of imagination the word "reliability trial " can be interpreted for the purpose of repudiation of the claim in cases where the vehicle meets an accident while in the custody of the authorized service centre during the course of handing of the vehicle for routine service of the vehicle after the purchase. It was submitted that the repudiation on the basis of treating the services of the vehicle and meeting of the accident in the custody of the authorized service centre as ''reliability trial '' is not only illegal, arbitrary, malafide but also unfair trade practice amounting to deficiency in service. According to him, words "reliability trials " and "limitations as to use " cannot be interpreted to include the trial runs by mechanic after servicing the vehicle. That the word "reliability trials " in "limitations as to use " clause of policy is used with reference to the motor race and not for trial runs of vehicle by mechanic after servicing of the vehicle. As against this, learned counsel for the Respondent contends that the trial runs by the servicing mechanic fall within the limitation or the exclusion clause of the policy as the policy did not cover the use for hire, reward, organized racing, pace making, reliability test, speed testing or carriage of goods in connection with any trade or business or use for any purpose in connection with Motor Trade. Submissions made by the counsel for the parties narrow down the issue to be determined as to "whether the repudiation of the insurance claim by the Insurance Company is justified under ''limitation as to the use '' clause provided in the policy cover.
INSURANCE Company has resisted its liability on the ground that the vehicle in question met with an accident while being run for ''reliability trial '' by the mechanic-cum-driver of Respondent No.2 when the car was brought to the garage for servicing. The case of the Respondent insurance company is that the trial runs by the servicing mechanic fall within the exclusion/ ''limitation as to the use '' clause of the policy. That the policy did not cover use for hire or reward, organized racing, speed testing, reliability trial or carriage of goods ..... Relevant clauses of the insurance coverage read as under:- "Section 1 Loss or Damage " The company will indemnify the insured against loss or damage to the motor car and/or its accessories whilst thereon:- a) by fire explosion, self-ignition or lightening; b) by burglary, house breaking or theft; c) by riot and strike; d) by earth quake (fire and shock damage); e) by flood, typhoon, hurricane, storm, tempest, inundation, cyclone, hailstorm, frost; f) by accidental external means; g) by malicious act; h) by terrorist activities i) whilst in transit by road, rail, inland, waterway, lift, elevator or air; j) by land slide/rock slide. Subject to a deduction for depreciation at the rates mentioned below in respect of parts replaced. "
"Limitations as to use: Use only for social, domestic and pleasure purposes and insured ''s own business. The policy does not cover use for hire or reward or for organized racing, pace making, reliability trials, speed testing, carriage of goods (other than samples) in connection with any trade or business or use for any purpose in connection with motor trade. "
Under Section 1 of the insurance coverage, insurance company undertakes to indemnify the insured against the loss or damage to the motor car and/or its accessories by fire explosion, self-ignition, lightening, burglary, housing breaking, theft, riot, strike, earthquake, flood, typhoon, etc., accidental external means, malicious acts, terrorist activities, whilst in transit by road, rail, inland, waterway, lift, elevator or air subject to deduction for depreciation at the rates mentioned. Further, under the clause ''limitations as to use '' the insurance company undertakes to indemnify for the loss or damage to the motor car or its accessories when the vehicle is used for social, domestic, pleasure purposes and for insured ''s own business only and excludes the cover for use for hire or reward or organized racing, pace making, reliability trial, speed testing, carriage of goods, etc..
RELIANCE on the ''limitation as to the use ''/exclusion clause of the policy by the Respondent is totally misplaced inasmuch as the word ''reliability trial '' cannot be interpreted to include the trials by mechanic after serving the vehicle or when the vehicle is taken by him for a trial run after service. The world ''reliability test '' in the ''limitation as to the use '' clause of the policy is used with reference to racing competitions/motor sport events organized all over the world. Reference can be made to the article on ''reliability trial '' in Wikipedia followed by numerous ''reliability trials '' competitions/events organized all over the world, predominantly in United Kingdom, wherefrom the concept of insurance originated. ''Reliability trial '' extracted from the Wikipedia, the free encyclopedia reads as under:- "A reliability trial is an organised bicycle ride which challenges a cyclist to complete a course, passing through designated control points, within a preset time limit. In the United Kingdom, such events are often held in the wintry opening months of the year and are used by club cyclists as training rides. A common test would be a 100 in 8 - 100 miles would have to completed within eight hours, including any stops. The term is historic and dates back to the early years of the 20th century when cycling equipment was less reliable, roads were rougher, routes were more poorly sign-posted, and mobile telephones had yet to be invented. The name was also a way of emphasising to the police, at a time when the place of cycle sport on British roads was insecure, that the mass rides they might see were not races. Reliability trial riders needed to be self-sufficient, adept at navigation, able to deal with mechanical problems, and fit enough to complete the course. In some cases, successful completion of the ride entitles the rider to a certificate. Reliability trials have lost a lot of their popularity although they remain a regular feature for sections, or clubs, of the Cyclists'' Touring Club. The function of reliability trials as a test of fitness, reliability and the ability to ride long distances has largely passed to the closely similar Audax style of riding. The term reliability trial is also used to refer to motorsport events and are similar in concept. Rather like rallynig, drivers and their vehicles (or riders and their motorcycles) must complete a designated course within a set time limit, without recourse to outside help along the way.
SIMILARLY , the ''reliability trials '' under South Australian ''reliability trials '' reads as under:- "A historic term that dates back to the early years of the 20th century when cycling equipment was less reliable. The term also refers to motorsport events and are similar in concept. Riders take on tough off-road competitive sections timed to the second, linked by easy transport sections. Rather like rallying, where drivers and their vehicles or riders and their motorcycles, must complete a designated course within a set time limit without recourse to outside help along the way. Solos and Sidecars ride for over 6 hours, sometimes in the dark and the main aim is just to finish. All spare parts and tools have to be carried from the start. Reliability trials are a true test of the skill and determination of rider and passenger. Thorough machine preparation is vital as these Trials can be won or lost in the garage. Public roads are used, meaning all machines must be registered and roadworthy plus all riders require a civil licence.
''Reliability trials '' are held in different countries. Recently, Scottish Six Days Reliability Trial 2011 was held from 2nd to 7th May 2011. The same competition is to be held for the year 2012 from 30th April to 4th May 2012. In India, Madras Motor Sports Club has been established to promote the sport of Motor car and Motor cycle racing and motor sport and to further the interest of motorists and motor-cyclist taking part in motor races and competitions in India or elsewhere to co-operate with others to this end. One of the objects of the club is as follows:- " To organize, promote and hold either alone or jointly with any other Association, club or persons motor race meetings, competitions and ''reliability trials '' for motor vehicles or any other athletic sports or pastimes and to offer, give or contribute towards prizes, medals and awards, therefore, an to promote, give or support dinners, balls, concerts and other entertainments arranged in connection thereto. Similarly, there are other clubs in the world which are organizing the racing competitions including ''reliability trial ''. For example, Himalayan car rally in India. To summarize, the ''reliability trials '' are akin to racing competitions/rallies with a distinction that the participants has to compete the designated course within a set time limit without recourse to outside help. It is a competition to judge the reliability/capability of the driver/rider under the demanding circumstances without external help. Even for the purpose of insurance, ''reliability trials '' are insured by specific insurers as provided in the Competition Brochure of ''reliability trial '' events. It is a total mis-interpretation to place the ''trials by servicing mechanic in the category of ''reliability trials '' for the purpose of exclusion from the policy cover.
TRIALS by a mechanic after servicing of the vehicle cannot be equated with the ''reliability trials '' occurring in the exclusion clause. Word ''reliability trials '' in the ''limitation as to the use '' is preceded by the term of racing competition like organizing racing, pace making and followed by the word ''speed testing ''. Applying the legal maxim Ejusdem Generis the world ''reliability trials '' would mean and/or to be interpreted to mean items/events similar to racing, rallies, pace making, etc., which are racing competitions excluded from the purview of the policy cover. A simple trial of the vehicle by the mechanic not being a racing event/competition would neither mean nor include within the term ''reliability trial ''. From the reading of the terms of the policy it is deducable that the clause ''Limitations as to the use '' covers the loss caused to the vehicle while it is used for social, domestic, pleasure purposes or the insured ''s own business but excludes racing competitions or motor sports of all kinds from the purview of the insurance cover. For this purpose the motor sports like ''organized racing '', ''pace making '', ''reliability trial '' and ''speed test '' are mentioned in series for the purpose of exclusion from the insurance cover. Interpretation/construction put by the insurance Company to even include the trial runs by the mechanic within the scope of ''reliability trials '' cannot be accepted and warrants rejection. Words ''reliability trials '' and ''speed tests '' provided in the ''limitation as to the use '' clause of policy cover refer to racing event/competition rather than trial runs or speed testing as may be used in common parlance. The speed testing as provided in the ''Limitations as to the use clause '' to the policy cover is a racing event/competition rather than any speed testing as may be used in common parlance.
WE are of the opinion that the State Commission has erred in holding that words "reliability trials " and "speed testing " occurring in the exclusion clause - "limitation as to the use " in the policy would include the trials runs or speed testing by the mechanic after servicing. For the reasons stated above, the Revision Petition is accepted with costs, order of the State Commission is set aside and that of the District Forum is restored. Respondent Insurance Company is directed to pay a sum of Rs.3,83,574.79/- to the Petitioner for the loss or damage to the vehicle as assessed by the surveyor along with interest @ 9% p.a. from the date of filing of complaint till realization. Rs.50,000/- are awarded by way of compensation for mental agony and harassment. Costs are assessed at Rs.10,000/-.