New India Assurance Co. Ltd. vs Anil Sharma

Prem Narain, Presiding Member

This revision petition no. 2684 of 2010 has been filed by the petitioner - New India Assurance Co. Ltd., against the order dated 27.04.2010 of the Madhya Pradesh State Consumer Disputes Redressal Commission, Bhopal ('the State Commission') in Appeal no. 526 of 2009.

The brief facts of the case are that the respondent/ complainant purchased a truck on 04.04.2005 and the same was insured vide policy no. 40602/31/05/01/00007473 by the petitioner/ the opposite party for the period from 28.03.2006 to 27.03.2007 for a sum insured of Rs.5,60,000/-. The insured truck caught fire due to short-circuiting on 30.05.2006 while carrying Sponge Iron from Satna to Pratappur. The incident was reported to the concerned Police station Nagode, but due to damaged original papers of the vehicle in the said fire, the Police denied to lodge the report. Thereafter, the complainant brought the photocopy of the original documents and lodged the report on 01.06.2006. The complainant also informed the petitioner. The petitioner vide letter dated 10.04.2007 repudiated the claim of the complainant on the ground of violating the terms and conditions of the policy. Thereafter, when nothing was done by the insurance company regarding the claim, the complainant sent a legal notice dated 17.04.2007 but no response was made. Hence, the complainant filed the complaint before the District Consumer Disputes Redressal Forum, Gwalior (Madhya Pradesh) ('the District Forum') on 23.09.2008 being CC no. 616 of 2008.

The District Forum vide its order dated 05.02.2009 dismissed the complaint of the complainant on the ground that the complaint was out of time period and thus, it wass not maintainable before the forum.

The State Commission vide its order dated 27.04.2010 allowed the appeal of the complainant. The State Commission directed OP insurance company to pay Rs.4,85,000/- (total loss assessed by the surveyor) to the complainant. However, since the vehicle has been financed by financier, the amount shall be paid to financier to the extent of finance.

Hence, the OP no.1 has filed the present revision petition before this Commission.

Heard the learned counsel for the petitioner. The respondent was proceeded ex parte vide order dated 06.01.2016.

Learned counsel for the petitioner has stated that the repudiation was mainly on two issues, the first issue was in respect of condition no. 7 which provides that the claim can only be preferred within a period of twelve months from the date of repudiation. The present claim was filed beyond the period of 12 months and therefore, the complaint was time barred. The second point on which the claim was repudiated by the insurance company was in respect of over loading of the truck in question. The District Forum had dismissed the complaint, however, the State Commission has allowed the complaint. The State Commission has considered only the aspect of limitation and has given a finding that there has been no delay under the provisions of the Consumer Protection Act, 1986, hence the claim has been allowed. The State Commission has not considered the fact of over loading of the vehicle. It was mentioned by the learned counsel that the capacity of the truck was only 6700 kgs, however, the truck was carrying sponge iron with weight of 14,860 kgs. Learned counsel further stated that if the overweight was upto 75% of the allowed weight, then the insurance company gives the insurance claim on non-standard basis. As the vehicle was carrying a load of more than double the admissible weight, the claim cannot be approved by the insurance company.

We have carefully examined the record and considered the arguments of the learned counsel for the petitioner. In respect of the limitation period, we agree with the finding of the State Commission because, the repudiation has been made vide letter dated 10.04.2007 and the complaint has been filed before the District Forum on 23.09.2008. Thus, the complaint has been filed within two years from the date of repudiation when the cause of action arose. Otherwise also, condition no.7 of the policy is against the provision of section 28 of the Indian Contract Act, 1872 and a larger Bench of this Commission in the case of RA No.87 of 2017 in CC/163/2016, Wilhelm Textiles India Pvt. Ltd. Vs. Oriental Insurance Co. Ltd., decided 05.09.2018 has taken this view.

It is also true that the State Commission has not dealt with the aspect of over loading and the State Commission has allowed the insurance claim as assessed by the surveyor and has directed the insurance company to pay Rs.4,85,000/-.

We do not see any point in remanding the case to the State Commission for deciding the issue of over-loading, rather, we deem it expedient to decide the case here so that unnecessary litigation is not extended. Learned counsel for the insurance company has also accepted that for over-loading upto 75% of the allowed weight, the insurance company settles the claim on non-standard basis, i.e., upto 75% of the admissible claim. In the present case, over-loading is more than 75% and therefore, the insurance company is not able to settle the claim on non-standard basis. The Hon'ble Supreme Court in the case of Amalendu Sahoo Vs. Oriental Insurance Company Limited, (2010) 4 SCC 536 has observed that if some condition of the policy has been violated, then the claim under the Motor Insurance can be settled as follows: Sr. No.

Description

Percentage of settlement

(i)

Under declaration of licensed carrying capacity

Deduct 3 years' difference in premium from the amount of claim or deduct 25% of claim amount, whichever is higher.

(ii)

Overloading of vehicles beyond licensed carrying capacity

Pay claims not exceeding 75% of admissible claim.

(iii)

Any other breach of warranty/condition of policy including limitation as to use.

Pay upto 75% of admissible claim.

From the above observation of the Hon'ble Supreme Court in the case of Amalendu Sahoo Vs. Oriental Insurance Company Limited (supra), it is clear that even if a vehicle is over-loaded, the claim can be settled on non-standard basis (upto 75%) treating violation of relevant condition of the policy. As the vehicle caught fire due to short circuit, we do not find any force in the argument of the learned counsel that short circuiting took place due to over-weight of the truck. As the over-loading is more than 100%, we are of the view that the claim may be settled on non-standard basis but not at 75% of admissible claim but limited to 60% of the otherwise admissible claim.

Based on the above discussion, we partly allow the revision petition no.2684 of 2010 and direct the petitioner insurance company to pay a sum of Rs.2,91,000/- (60% of Rs.4,85,000/-) to the respondent/ complainant instead of Rs.4,85,000/- as awarded by the State Commission. With this modification, the order of the State Commission is upheld. The order of the State Commission as modified by this order be complied by the petitioner insurance company within a period of 45 days from the date of receipt of this order.