NEW INDIA ASSURANCE COMPANY LTD. vs MANDEEP SINGH

APPELLANT has filed this appeal challenging order dated 21.11.2006, passed by State Consumer Disputes Redressal Commission, Chandigarh (for short as ''State Commission '') in Original Complaint No. 5 of 2003.

BRIEF facts are that respondent/complainant was owner of a truck which he purchased on 7.1.2001 under Telco Finance Scheme. The truck was got comprehensively insured with petitioner/O.P. Insurance Company for the sum of Rs. 6.95 lac. The period of insurance was 31.12.2001 to 30.12.2002. By order of Deputy Commissioner, Bhatinda, the truck was hired by military authorities through District Administration (District Magistrate) on 24.12.2001. For the user of the truck by the military authorities they were to pay Rs. 1,500 per day to the respondent as per Punjab Govt. Notification No. 2/10/91-4T(2)4774 dated 18.4.2000. The truck was handed over to the military authorities. On 11.1.2002, while the truck was in cantonment of Bikaner (Rajasthan), due to fire in the yard, the truck in question along with other vehicles caught fire and was completely destroyed. The claim was lodged with the petitioner, which repudiated the claim,vide letter dated 23rd January, 2003 on the following grounds: (i)The respondent had received compensation from the military authorities which took care of the loss to the truck; (ii)The vehicle had been requisitioned by the army authorities for carriage of military goods which falls under the exclusion clause No. 6 of general exceptions in the policy.

In its written statement, appellants took preliminary objection No. 1 as under: "The case in hand falls within the ambit of Clause 6 of general exceptions of the policy as the truck in question at the time of occurrence was being used for carrying arms and ammunition by the military authorities in logistic nodes i.e. warlike situations. "

APART from above, appellants also stated that since respondent had already received compensation from the military authorities, he was not entitled to claim anything under the Insurance Policy.

STATE Commission,vide impugned order, allowed the complaint and passed the following direction: "Amount of Rs. 6,50,000 be remitted to the complainant by the Insurance Company within a period of 30 days after the receipt of a copy of the order failing which the amount will carry interest at the rate of 9% per annum from the date of order till payment. "

It is contended by learned Counsel for appellants that as per terms and conditions of the policy, appellants are liable to reinstate or restore the vehicle to its original position, which existed prior to the accident. In the present case, respondent has already got the entire compensation for the loss sustained by him from the Military Authorities, as at the time when accident took place, the vehicle in question was being used by the Military Authorities. Since, compensation qua the entire loss sustained by respondent has been received by him, as such he is estopped from taking the claim from appellant also.

ANOTHER contention made by learned Counsel is that the vehicle in question was being used in contravention of the provisions of the Clause 6 of the general exceptions of the policy and as such appellants are not liable to indemnify the respondent.

IN support, learned Counsel has relied upon the decision of the Apex Court in National Insurance Company Limited v. DeepaDevi and Others, I (2008) ACC 25 (SC)=I (2008) CLT 88 (SC)=I (2008) SLT 62=(2008) 1 SCC 414. On the other hand, it has been contended by learned Counsel for the respondent that though Military Authorities have paid certain sum to the respondent, but same has been paid as compensation towards loss of the business. Further, present case does not fall under Clause 6 of General Exceptions of the Policy, hence, appellants are liable to indemnify the loss suffered by the respondent in respect of his vehicle. Thus, there is not infirmity or illegality in the impugned order.

STATE Commission in its order ob-served: "It is not being disputed that the military authorities had requisitioned the vehicle as this fact is also being mentioned in the repudiation letter. The questions for our determination are -(i) whether after the requisition of the truck the same was being used in a warlike operation; and (ii) if it was a case of compulsory requisition by army '' authorities or any Governmental agency and not voluntarily giving the vehicle to the military authorities for its use, would Clause 6 of the general exceptions of the policy be applicable? If our answer to question No. (ii) is in favour of the complainant we need not delve into question No. (i) because in that situation if it is a case of compulsory requisition and even if the truck was being used in warlike operations without any consent from the complainant then Clause 6 of the general exceptions of the policy would not be applicable. There is nothing on record that the vehicle were requisitioned by the military authorities to cater to warlike operations. If it is a case of compulsory requisition of a truck it ipso facto follows that the complainant could not have avoided handing over the truck to the District Administration for giving it to the military authorities. It is none of the concern of the complainant thereafter as to for what purpose the truck is used by the military authorities. As observed above, there is nothing on the record to show that the truck was being taken or requisitioned by the military authorities to cater to warlike operations. In these circumstances, we are of the view that Clause 6 of the general exception of the policy would not come into play. Coming to the second point that the complainant had already received compensation from the Military Authorities and, therefore, nothing was payable by the Insurance Company. We are of the view that this ground for repudiation has no basis. The Insurance Company should not be concerned as to what amount the insured gets from somebody else as compensation. It is an independent contract of the insured with the insurer that in case of a certain mishap a certain amount will be payable. It is also not on record as to on what count the so-called compensation of Rs. 6,86,000 was paid by the military authorities to the complainant. The complainant tried to explain that this amount was towards the loss of business in the sense that military authorities were to pay Rs. 1,500 per day for the user of the truck and till the compensation was paid on 30th of September, 2002 (the truck was requisitioned on 24th of December, 2001) the truck should be deemed to be under the user of the military authorities. The balance amount should be taken towards the cost of the body of the truck, the loss of documents and otherwise on account of loss of business. Be that as it may, as we are of the view that it is none of the concern of the Insurance Company as to what compensation, etc. a person gets from a third party as the claim is based upon an independent contract with the Insurance Company When the Insurance Company issues a policy the insured and the insurer are bound by the terms of the contract. There is no term in the policy that if any compensation etc. is received by the insured from any third party the Insurance Company is entitled to set off that amount which otherwise may become payable to the insured. The truck was insured for Rs. 6,95,000 on 31.12.2001. The depreciated value on the basis of purchase on 7.1.2001 and I.E.V. on 31.12.2001 was fixed at Rs. 6,95,000. We do not want to send back the case to the Insurance Company to find out the market value of the truck as on 17th of January, 2002 when the intimation of the loss was given to the Insurance Company. Under the circumstances, we consider it reasonable to fix the market value of the truck at Rs. 6,50,000 (IEV on 31.12.2001 was Rs. 6,95,000). This amount would be payable by the Insurance Company to the complainant. "

CLAUSE 6 of the general exceptions of the policy in question reads as under: "Any accident loss, damage and/or liability directly or indirectly or proximately or remotely occasioned by, contributed by or traceable to or arising out of or in connection with war, invasion, the act of foreign enemies, hostilities or warlike operation (whether before or after declaration of war) Civil War, Mutiny, Rebeltion, Military or usurped power or by any direct or indirect consequences of any of the said occurrences and in the event of any claim hereunder the insured shall prove that the accident loss, damage and/or liability arose independently of and was no way connected with or occasioned by or contributed by or traceable to any of the said occurrences or any consequences thereof and in default of such proof the company shall not be liable to make any payment in respect of such a claim. "

Bare reading of above clause will show that Insurance Company shall not be liable to make any payment in respect of such a claim where damage has been caused due to the insured vehicle in a warlike operation. There is nothing on record to show that during the period of the policy in question, there is any warlike situation and in those conditions vehicle in question was damaged.

THUS , Clause 6 of the general exception of the policy, is not applicable at all to the facts of the present case.

AS per averments made in the complaint, due to fire accident, the truck in question was completely destroyed and Military Authorities had owned the moral responsibility to compensate the respondent. There is no rebuttal to these averments by the appellants. Further, as per order dated 28.2.2008 passed by this Commission, respondent was directed to disclose on affidavit the break-up of the amount of Rs. 6,89,000 received from the Military Authorities. In compliance to that order, respondent has filed his affidavit, (placed at page 56 of the paper book).

AS per affidavit, the compensation amount paid by Military Authorities to the respondent is as under: (a) Truck body Rs. 2,00,000 (b) Tripalsand Rasas Rs. 25,000 (c) Permit (Permission) Rs. 50,000 (d) Rent @ Rs. 1,500 per day from 24.12.2001 to 30.9.2002(276 days) Rs. 4,14,000 Total Rs. 6,89,000

THE amount received by the respondent from Military Authorities is with regard to the loss of business, etc., as such appellants in the present circumstances cannot escape from their statutory liability, which is based upon independent contract with the respondent. Hence, we fully agree with the reasoning given by the State Commission that it is none of the concern of the appellants as to what compensation, etc. a person gets from a third party as the claim is based upon an independent contract with the Insurance Company.

THE judgment cited by learned Counsel for appellants is not at all applicable to the facts of the present case.

UNDER these circumstances, we do not find any infirmity or ambiguity in the impugned order passed by the State Commission. Consequently, we find no merit in the present appeal and same is hereby dismissed. Parties shall bear their own costs. Appeal dismissed.