New India Assurance Co. Ltd. vs Gurdeep Singh

THIS is an appeal under Section 15 of the Consumer Protection Act (hereinafter called ''the Act'') against the judgment and order dated 13.3.2002 passed by District Consumer Forum, Kanpur Dehat in Complaint Case No. 268/2000.

A complaint under Section 12 of the Act was preferred by the complainant/respondent with the allegation that he was the owner of a transport vehicle No. UP-78N/3627 which was comprehensively insured with the appellant for a period of 30.3.1997 to 29.3.1998 and the said vehicle met with an accident on 7.11.1997 and subsequently after lodging the FIR with Police Station Bhognipur Claim No. 57/1190 for indemnification of the loss was placed before the appellant company who subsequently deputed the Surveyor who assessed the loss for Rs. 1,75,000/-. It was further alleged that it was at one stage that compensation of Rs. 1,75,000/- was offered by the appellant company to the complainant which was also accepted but subsequently through a letter in question that offer of compensation of Rs. 1,75,000/- was recalled on the filmsy ground that the driver was not possessed of the valid driving licence. Consequently, the present complaint was filed. In the written statement factum of accident taking place during the currency of insurance and the vehicle being comprehensively insured and Surveyor assessing the loss of Rs. 1,75,000/- and offering of compensation was accepted. However, it was pleaded that since it was in the knowledge of the claimant that the driver at the time of accident was not possessed of the valid driving licence the liability of indemnification did not arise.

The District Forum after taking into account the respective contentions and considering the materials available on record came to the conclusion that the complaint was liable to be allowed and consequently passed an order directing the appellant to pay compensation of Rs. 1,75,000/- along with interest from 9.11.1997 @ 15% p.a. and Rs. 1,000/- towards the cost of the complaint.

AGGRIEVED against the same the present appeal has been preferred. We have heard Mr. Raj Nath. Counsel for the appellant and Mr. S.C. Awasthi, Counsel for the respondent and perused the material available on record.

MR. Nath emphatically submitted that in view of the ratio contained in Sohan Lal Passi v. P. Sesh Reddy and Others, II (1996) ACC 617 (SC)=1996 (2) TAC 733 (SC), and New India Assurance Company Shimla v. Kamla and Others, III (2001) SLT 150=I (2002) ACC 346 (SC)=2001 (2) TAC 243 (S.C.) since it was a case of breach of conditions of policy to the effect that the vehicle was being driven by a person not holding a valid driving licence and it was not a case of third party risk the insurer was not at all liable to indemnify the loss occasioned by the vehicle in question on account of accident. Mr. Awasthi on the other hand arguing for the respondent submitted that the insurer could not prove on the basis of clear and cogent evidence that the owner was having the knowledge that the driver driving the vehicle in question was not possessed of a valid driving licence and accordingly the insurer cannot shirk from its liability of indemnifying the loss. The aforesaid ratios make it amply clear that the expression ''breach'' occurring in Section 96(2)(b) means infringement or violation of a promise or obligation and as such the Insurance Company will have to establish that the insured was guilty of an infringement or violation of a promise and further the insurer will also have to satisfy the Tribunal or Court that such violation on the part of the insured was wilful. Obviously in the instant case to get rid of the liability of indemnification reliable evidence could not be led by the insurer to prove that there was violation or infringement i.e., ''breach'' of the terms and conditions on the part of the insured was wilful. The only document more so on which reliance was placed by the insurer was a photostat copy of the letter purporting to have been issued by the Regional Transport Office, Jhansi that licence No. 22471/JHS/87 was issued in the name of Om Prakash and not in the name of Udai Raj Singh. This could not be taken as a proof that the vehicle was not being driven at the time of accident by Udai Raj Singh with a valid driving licence.

THUS on merit we see that no justification to upset or vary the findings recorded by the learned District Forum. However, as argued appropriately and rightly by Mr. Nath we are of the view that the rate of interest awarded by the District Forum is on excessive side. It is not a case in which for no rhyme and reason the repudiation was done. The recourse to repudiation by the insurer was taken on the strength of entertaining an impression that the driver in question at the time of driving the vehicle resulting into accident was not possessed of a valid driving licence. That being so we are of the view that the appropriate rate of interest which should have been awarded could be 9% simple interest from the date of repudiation i.e., 26.2.1998. ORDER The appeal is partly allowed. The appellant is directed to make the payment of Rs. 1,75,000/- along with interest @ 9% p.a. from 26.2.1998. Parties will bear their own cost. However, it is expected that the payment shall be made by appellant within a period of one month from the date of receipt of certified copy of the order. Let copy of the order be issued to the parties as per rules. Appeal partly allowed.