National Insurance Co. Ltd vs Anil Trading Co.

M. Shreesha, J

Challenge in these Revision Petitions under Section 21(b) of the Consumer Protection Act, 1986 (for short the "Act") is to the impugned orders dated 05.03.2010 in First Appeal No. 1201 and 1202 of 2008 passed by the Punjab State Consumer Disputes Redressal Commission at Chandigarh (for short "the State Commission"). By the impugned orders, the State Commission has dismissed the Appeals preferred by the National Insurance Company Ltd. (hereinafter referred to as "the Insurance Company") and concurred with the finding of the Consumer Disputes Redressal Forum, Ludhiana (for short "the District Forum").

As both these Revision Petitions arise out of the common impugned order they are being disposed of vide this common order.

The facts in brief in Complaint No. 449/2006 (subject matter of RP No. 2358/2010) are that the Complainant Company is owner of a 4 wheeler LVT bearing registration No. PB10-BM-5972 and the same was insured with the Insurance Company for an amount of ₹5,00,000/- for the period from 28.02.2005 to 27.02.2006. While so, the vehicle met with an accident on 04.05.2005 and a police complaint was lodged with the Police Station Jagraon. As the vehicle was completely damaged, a claim for an amount of ₹1,32,726/- for damage to the truck and ₹26,000/- towards damage to the tanker totalling a sum of ₹1,58,726/- was made with the Insurance Company. A surveyor was appointed who inspected the damage. The Complainant also submitted the requisite documents. However, the first claim was rejected vide letter dated 02.09.2005 on the ground that the permit of the vehicle was to carry tea, karyana goods, food grains, oil seeds, pulses, bardana but not to carry edible oil, for which permit of the vehicle was not valid and the second claim was not settled on the ground that the prior 15 days' intimation was not given regarding the dispatch of consignment. Despite repeated requests the Insurance Company did not settle the claim and hence the Complainant Company approached the District Forum seeking a direction to the Insurance Company to release the claim amount of ₹1,58,726/- along with interest @ 18% p.a. together with compensation of ₹1,00,000/- and costs.

The Insurance Company filed their Written Version stating that the Surveyor in his report dated 20.06.2005 stated that the vehicle did not have the valid permit to carry edible oil and in fact the vehicle was a tanker and at the time of the alleged accident it was carrying oil for which it was permissible to carry and hence the repudiation is justified. The second claim was repudiated vide repudiation letter dated 11.08.2005 in the following manner:-

"On going through claim papers it is observed that you have purchased oil on 03.05.2005 and declaration issued on 04.05.2005 after accident and bill for purchase of oil and G.R. have issued on 03.05.2005. The declaration submitted by you in this of 05.05.2005 after accident. After that loss you have also not submitted any declaration. You are requested to explain the reason of not declaring/submitting declaration on 03.05.2005."

The District Forum based on the evidence adduced allowed the Complaint in part directing the Insurance Company to pay ₹1,34,659/- along with interest @ 9% p.a. from the date of the repudiation till the date of payment together with compensation of ₹5,000/- and costs of ₹1,000/-.

Aggrieved by the said order, Insurance Company preferred an Appeal bearing No. 1201 of 2008 before the State Commission which while concurring with the findings of the District Forum dismissed the Appeal.

The facts in brief in Complaint No. 448/2006 (subject matter of RP No. 2359/2010) are that the Complainant Company also insured the mustard oil which was being carried over in the above-stated ill-fated vehicle bearing registration No. PB-10-BM-5972. The said vehicle was carrying 60Q-25K mustard oil valuing ₹2,65,678/- and it was insured with the Insurance Company for an amount of ₹15 lakhs. Due to the said accident not only was the vehicle damaged but mustard oil was also destroyed. The Complainant managed to save 31Q-10Q mustard oil and as such suffered loss of 29Q-15K mustard oil valued @ ₹1,41,394/-. A Claim was lodged with the Insurance Company which was rejected by them vide their letter dated 11.08.2005 on the ground that oil was purchased on 03.05.2005 and declaration was issued on 04.05.2005 i.e. after accident and not before the accident. It was pleaded by the Complainant that he got information of the accident in the mid-night of 3/4 May, 2005. Thereafter, he went to the spot in the evening of 04.05.2005 and filed the declaration with the Insurance Company on 05.05.2005 and so there was no delay in filing the declaration with the Insurance Company.

The Insurance Company filed their Written Version stating that the Surveyor in his report dated 02.08.2005 stated that the Complainant issued declaration after occurring of the loss on 04.05.2005 against invoice dated 03.05.2005 and as such the claim was repudiated as no declaration was submitted to the Insurance Company at the time of dispatch of the consignment rather the same was sent to the Insurance Company after the alleged loss.

The District Forum based on the evidence adduced allowed the Complaint in part directing the Insurance Company to pay ₹1,34,454/- along with interest @ 9% p.a. from 01.02.2006 together with compensation of ₹10,000/- and costs of ₹2,000/-.

Aggrieved by the said order, Insurance Company preferred an Appeal bearing No. 1202 of 2008 before the State Commission which while concurring with the findings of the District Forum dismissed the Appeal.

Learned Counsel appearing for the Revision Petitioners submitted that there is a specific condition under the Insurance Policy which reads as under:-

"The policy covers use only under a permit within the meaning of the Motor Vehicles Act, 1988 or such a carriage failing under sub section 3 of Section 66 of the Motor Vehicles Act, 1988."

Learned Counsel vehemently argued that the above conditions specified in the policy covers only the use of the vehicle which is permissible under the permit issued within the meaning of the Motor Vehicles Act, 1988. The Insured, at the time of the accident, did not possess any permit in respect of the vehicle in question for carrying edible oil. The permit was granted w.e.f. 09.06.2005 whereas the accident in question had occurred on 04.05.2005 and this amounts to violation of terms and conditions of the policy of insurance and Section 66 of the Motor Vehicles Act, 1988. He further contended that the State Commission failed to appreciate that the vehicle in question was approved for carrying weight upto 2730 kgs. whereas at the time of the accident it was carrying 6025 kgs. mustard oil which is also a violation on the part of the Insured. Overloading of the vehicle was the cause of the accident. The vehicle in question was registered as an open truck, whereas at the time of accident it was being used as an oil tanker which is again a violation of Section 52 of the Motor Vehicles Act and, therefore, the repudiation is justified.

Learned Counsel for the Respondent submitted that in the Insurance Policy the nature of the vehicle has been mentioned as Tata Tanker and once the Insurance Company itself had shown the subject vehicle to be a tanker in their own Policy, they are estopped from taking the plea that the nature of the vehicle has been changed by the Complainant against the terms and conditions of the Insurance Policy. He further contended that in the Insurance Policy which was obtained qua mustard oil it is specifically mentioned that edible oil of all kinds was covered under the said Policy and that the declaration was made on time.

The facts not in dispute are that there are two policies taken by the Complainant Company; the main ground for repudiation in the letter dated 02.09.2005 is that the permit of the vehicle is only for carrying tea, karyana goods, food grains, oil seeds, pulses, bardana; that the permit for the vehicle is of LTV open body whereas as per the survey report the said vehicle is a tanker and at the time of accident was carrying edible oil for which there was no permit. Learned Counsel appearing for the Insurance Company also contended that the vehicle was registered as a tanker as on 04.05.2005. This is not the ground for repudiation. It is also relevant to mention that the question of overloading was also not a ground for repudiation. The Hon'ble Supreme Court in Galada Power & Telecommunication Ltd. Vs. United India Insurance Co. Ltd. & Anr. (2016) 14 SCC 161 has clearly laid down that the Insurance Company cannot travel beyond the grounds of repudiation letter issued by it and cannot be allowed to contest the claim on a ground which was not raised in their repudiation letter. It is pertinent to mention that even in their Written Version their defence was confined to the grounds of repudiation only. No such plea was raised before the Fora below. A brief perusal of the registration certificate of the vehicle bearing No. PB10-BM-5972 shows the type of body as 'open truck' with the gross vehicle weight of 5300 kgs. The Goods Carriage Permit also shows that it is for one LTV open truck. The Surveyor in his report mentions the type of body as oil tanker mentioned as open truck in Registration Certificate. The brief perusal of the Insurance Policy shows that it is a goods carrying commercial vehicle with an IDV of ₹5,00,000/- and that it is a tanker. Having issued a policy for a tanker the Insurance Company cannot now say that it is an open truck. The Policy could not have been given without physical inspection of the vehicle and, therefore, the violation cannot be considered to be a fundamental breach specially in the light of the fact that the Insurance Policy shows that the edible oil of all kinds was covered under the Policy.

Now the second letter of repudiation is being addressed to. Learned Counsel for the Revision Petitioner argued that before each shipment a declaration has to be given by the Insured in case of imports within 15 days of the shipment or arrival of the shipment whichever is earlier. The limit per transit is ₹10,00,000/-. The main ground for repudiation in this claim is that the Complainant had purchased oil on 03.05.2005 and declaration was issued on 04.05.2005 after the accident and the bill for purchase of oil and the goods receipt were issued on 03.05.2005, whereas the declaration was submitted by the Complainant on 05.05.2005 after the date of accident.

It is pleaded that the Complainant got information of the loss of mustard oil by the driver in the mid-night of 03-04.05.2005 when the tanker met with an accident. After having heard of the accident, the Complainant was anxious to minimize the loss of the mustard oil and reached Ludhiana only in the evening of 04.05.2005 and submitted the declaration with the Insurance Company immediately on 05.05.2005. I do not find any substantial grounds to disbelieve these reasons. It is pertinent to note that in the Insurance Policy it is clearly stated that the declaration should be furnished within 15 days from the date of the shipment in case of imports or on arrival of shipment whichever is earlier. In the instant case the period of 15 days was not complete and the Complainant had given information within the relevant time. Therefore, I see no grounds to interfere with the finding of the Fora below with respect to the deficiency of service by the Insurance Company especially keeping in view the decision of the Hon'ble Supreme Court in Lakshmi Chand Vs. Reliance General Insurance (2016) 3 SCC 100 in which it has been laid down that insurer should establish that there is a fundamental breach and that the subject fundamental breach had a causal relationship/nexus with the accident.

In the instant case there is no documentary evidence filed by the Insurance Company to establish that there was any fundamental breach of the policy either in terms of the subject vehicle being an oil tanker, for which the Insurance Policy was actually issued and also with the information regarding the loss of mustard oil within a day of the loss. For all the afore-noted reasons, we do not find it a fit case to interfere with the well-considered orders of the fora below specially keeping in view our limited revisional jurisdiction as envisaged by the Hon'ble Supreme Court in Rubi (Chandra) Dutta Vs. United India Insurance Co. Ltd. (2011) 11 SCC 269. Hence in the result, both the Revision Petitions are dismissed with the afore-noted observations.

Vide an order dated 03.08.2010 the operation of the impugned order was stayed subject to the deposit of the 50% of the amount awarded by the fora below. Needless to add, this amount shall stand transferred to the Complainant Company with accrued interest and the same shall stand adjusted from the decretal amount.