Case BriefsTribunals/Commissions/Regulatory Bodies

State Consumer Disputes Redressal Commission, Telangana: Justice MSK Jaiswal (President) and Meena Ramanathan (Member) upheld the District Commission’s Order observing the consequence of suppressing the material fact while taking an insurance policy.

If the insurer can show that prior to the date of declaration of being healthy, the insured was suffering with ailment which was within her knowledge but was suppressed, then the insurance company is well within its right to repudiate the claim on the ground of suppression veri.

Complainant had submitted that his wife has obtained new money back policy from the OPs with a duration of 20 years for an assured sum of Rs 10,00,000. At the time of accepting the policy, the OPs carried out mandatory medical tests on the proponent and issued the policy in question.

While the policy was in force, the holder died due to cardiorespiratory arrest.

Being the nominee, complainant made the claim with the OPs and to the utter shock and surprise, the OPs repudiated the claim on the ground that the deceased life assured was suffering from lung cancer and took treatment prior to obtaining the policy, hence the claim was repudiated.

Complainant prayed to direct the OPs to pay the amount.

It was stated that OPs investigated the matter, and it was revealed that the deceased life assured suppressed the material fact relating to her health condition giving incorrect answers in the proposal form.

Analysis, Law and Decision

Bench noted that OPs submission was that the insured was suffering from serious ailment viz., lung cancer and suppressed the said fact.

Commission reiterated the legal position that if the insured is found to have suppressed the information which was material for the insurer to decide about the issuance of the policy is made out, the insurance company cannot be made liable to indemnify the insured on the ground that contractual obligations between insured and insurer are based purely on good faith and if insured has knowingly failed to reveal the information which was within her exclusive knowledge, the insurer could not be said to be liable to indemnify the insured.

In the present case, the insurance company contended that even before taking the policy, the insured was suffering from a serious ailment and was undergoing treatment and evidence was placed on record with regard to the said contention.

Coram held that perusal of the crucial documents on record leaves no room for doubt that the insured was aware that she was suffering from a serious ailment for more than 6 months prior to taking the insurance policy and suppressing all those facts, she took the policy.

Therefore, District Commission’s Order holding that complainant was not entitled to any relief was upheld and the complaint was dismissed.[K.N. Vidyakarji v. Life Insurance Corporation of India, FA No. 402 of 2020, decided on 15-06-2021]


Advocates before the Commission:

Counsel for the Appellant: Karakot Nagekar Sai Kumar

Counsel for the Respondents: KRL Sarma

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Anup K. Thakur (Presiding Member) dismissed a consumer complaint against the insurance company in case of a Marine Cargo Specific Voyage Policy, holding that it was for the insured/complainant to ensure full compliance of all the policy conditions in its own interest and that the principle of utmost good faith in the present case favoured the insurance company strongly.

Complainant, Mauria Udyog Ltd. and Jotindra Steel & Tubes Ltd. purchased marine cargo-specific voyage insurance policy from United Insurance Co. Ltd., Noida (OP-1) and facts in both the cases are identical.

Issue for Consideration:

Whether the OP had committed any deficiency in service by withdrawing the guarantee and impliedly, denying the insurance claim on the ground that the Marine Vessel (M.V )was not a classified M.V ad did not satisfy the condition mentioned in the policy viz. “Institute Classification Clause with deletion of held cover provision”.

Bench stated that both parties claimed that they had acted in good faith.

OP’s case was that it depended entirely on the information furnished by the insured to issue the policy and when it came to know that the M.V. was not a classified M.V., it immediately withdrew the guarantee it had extended to the adjusters and informed the complainant.

Complainant, on the other hand, argued that it supplied information on the M.V. when it came to it’s knowledge as it was only one of the importers of cargo, on CIF basis, it had no means of knowing the classification of the vessel any sooner. Further, it was not it’s responsibility alone to have ascertained the classification of the M.V. and the implied seaworthiness or otherwise. OP too could have and should have ascertained the M.V.’s classification status, as per it’s own internal circulars. That the OP singularly failed to do so was a deficiency in service and the complainant should not have to suffer repudiation of its genuine claim on this account.

Insurance contract is a contract of utmost good faith, as laid down by the Supreme Court.

CRUX:

Whether the principle of good faith was violated?

Bench on perusal of the records found that M.V. was old and that at the time of it’s engagement in the instant case, it was not classed with any approved society under the International Association of Classification Societies (IACS).

This finding of the surveyor has not been disputed. Indeed, complainant’s argument has remained confined to claiming that it was not as if the vessel was not classified at all; rather, it was listed in the International Register of Shipping. OP has, on the other hand, firmly held that the vessel was not classified as required by the policy clause “Institute Classification Clause with deletion of held cover provision”. Indisputably, therefore, it can be safely concluded that as per OP’s policy clause, the vessel was not worthy of being insured. Yet, it was.

Should the OP have insured the complainant’s cargo, without full knowledge of the vessel and its classification?

Bench held that the complainant failed to establish it’s case.

Reasoning:

It was the complainant, the importer, who had purchased the insurance cover. It was, therefore, reasonable that it had to be vigilant about all the conditions of taking an insurance cover.

The complainant, a regular importer, ought to have known the terms and conditions accompanying a Marine Cargo Specific Voyage Policy.

Although was for the OP to do the necessary due diligence on the classification of the vessel, but, It was the complainant whose cargo was to be insured against all risks associated with the marine voyage. It was therefore for the complainant to have ensured full compliance of all the policy conditions, in it’s own interest.

Hence, merely a cover note, with details of vessel and voyage left blank, on “To Be Declared” basis, from the OP-insurance company, could not have meant that the complainant could then have assumed the contract of insurance as complete and taken no further steps other than a mere communication of details of the shipment, including the vessel’s name, to the OP.

Bench, however, added that it was unreasonable for the OP insurance company to proceed on good faith and issue the insurance policy, in the hope that all the terms and conditions would be complied with, if and when a claim were to be filed.

OP displayed the good faith in issuing the insurance policy, leaving the box in the policy schedule blank.

Utmost Good Faith

The principle of utmost good faith, in the instant case, favours the OP strongly. It was the complainant’s responsibility, first and foremost, to have kept the OP fully apprised of the classification status of the M.V. as soon as it came to know.

In view of the above discussion, the instant consumer complaint was dismissed. [Mauria Udyog Ltd. v. United India Insurance Company Ltd., 2021 SCC OnLine NCDRC 16, decided on 28-01-2021]


Advocates for the parties:

For the Complainant:  Joy Basu, Sr. Advocate with T.S. Ahuja, Advocate

For the Opposite Parties: Amit Kr. Singh, Advocate

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): C. Viswanath (Presiding Member) observed that:

“Conduct of the insured becomes relevant on the facts of each case to ascertain whether the discharge voucher in the full and final settlement was given  voluntarily or there was coercion or undue influence on the Complainant.”

The instant application was filed under Section 19 of the Consumer Protection Act, 1986 against the Maharashtra State Consumer Disputes Redressal Commission’s Order.

Complainant had obtained “Standard Fire and Special Perils” Insurance Policies for stocks of cotton etc. and plant and machinery. Due to a fire break out at the complainant’s factory, huge stock of cotton got damaged.

Surveyor assessed the loss at Rs 32,92,525 only, though the total loss suffered was to the tune of Rs 99,45,286. Complainant submitted that since he was facing financial difficulties he accepted the settlement offered by the OP and executed the Indemnity Bond and Discharge Voucher in the name of OP.

Further, alleging the deficiency in service by OP, he filed a Complaint before the State Commission.

Aggrieved by the State Commission’s Order, complainant preferred the present appeal before this Commission.

Analysis and Decision

Bench noted that in several insurance claim cases under the Consumer Protection Act, it has been held that if a Complainant satisfies the Consumer Forum that Discharge Vouchers were obtained by fraud, coercion, undue influence etc., they should be ignored, but if they were found to be voluntary, the Complainant will be bound by it resulting in rejection of the Complaint.

“…mere signing of Discharge Voucher will not bar the Complainant/Claimant from raising a dispute before this Commission.”

 Commission further stated the only question to be addressed is whether the Discharge Voucher was signed under undue influence or coercion?

Whether the Complainant received Rs 39,72,829 towards full and final settlement or under protest pending investigation?

Further, respondents counsel submitted that there was a clarity expressed to the Complainant that unless the Discharge Voucher was signed, payment would not be released and therefore, the Discharge voucher was signed under coercion.

Bench while concluding held that “If at all the Complainant had an objection to the nature of the settlement, he should have recorded the same while signing the settlement”, hence no infirmity in the State Commission’s order was found.

In light of the above, the instant appeal was dismissed. [Arihant Industries v. United India Insurance Co. Ltd., 2021 SCC OnLine NCDRC 8, decided on 04-01-2021]


Advocates for the parties:

For the Appellant: S.M. Tripathi, Advocate

For the Respondent: Nanita Sharma, Advocate

Case BriefsHigh Courts

Chattisgarh High Court: A Division Bench of P. R. Ramchandra Menon and Parth Prateem Sahu JJ., allowed the appeal partly and modified the impugned award.

The facts of the case are such that on 04-07-2012, claimant while returning with his friend form Masturi to his village Tikari on Tata Magic (hereinafter referred to as ‘offending vehicle’), met with an accident and turned turtle wherein the claimant and other passengers suffered grievous injuries. An application was filed under Section 166 of the Motor Vehicles Act, 1988 i.e M.V. Act seeking compensation and Rs 6, 50,000 was granted vide award dated 06-01-2014 passed by the 6th Additional Motor Accident Claims Tribunal, Bilaspur, Chhattisgarh i.e. MACT. Aggrieved by the same, instant appeal was filed by the insurance company/ appellants under Section 173 challenging the impugned award.

Counsel for the appellants submitted that that on the date of accident, there was no valid and effective driving licence with driver of the offending vehicle, there was no valid permit, fitness and registration and thereby there was breach of conditions of insurance policy, hence, the Insurance Company is not liable to indemnity the injured. It was also submitted that MACT while deciding the issue with regard to breach of conditions of insurance policy has only taken into consideration the issue of driving licence and decided the issue but did not consider the ground of permit raised by appellant/Insurance Company specifically, though recorded in the impugned award.

Counsel for the respondents submitted that MACT after taking into consideration the entire pleading and evidence placed on record, has passed just and proper award, which does not call for any interference.

During investigations, permit was not produced and the owner of the offending vehicle did not present himself as witness before court though filed reply to the claim petition. It was further found on examination of other witnesses that insurance policy was issued for the offending vehicle and the vehicle was insured as ‘Passenger Carrying Commercial Vehicle’, for which, permit is necessary.

Section 66 (1) of the M.V. Act provides for the necessity for permits, which reads as under for easy reference:

“66. Necessity for permits.-(1) No owner of a motor vehicle shall use or permit the use of the vehicle as a transport vehicle in any public place whether or not such vehicle is actually carrying any passengers or goods save in accordance with the conditions of a permit granted or countersigned by a Regional or State Transport Authority or any prescribed authority authorising him the use of the vehicle in that place in the manner in which the vehicle is being used:

Provided that a stage carriage permit shall, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a contract carriage:

Provided further that a stage carriage permit may, subject to any conditions that may be specified in the permit, authorise the use of the vehicle as a goods carriage either when carrying passengers or not:

Provided also that a goods carriage permit shall, subject to any conditions that may be specified in the permit, authorise the holder to use the vehicle for the carriage of goods for or in connection with a trade or business carried on by him.”

The Court observed that from perusal of aforementioned provisions of Section 166 of the M.V. Act, the requirement of permit has been made mandatory for use of the vehicle as ‘Transport Vehicle’ in any public place for carrying passengers or goods.

The Court thus held that MACT erred in not considering that non-applicants 1 and 2 i.e. driver and owner of the offending vehicle failed to produce permit of the offending vehicle and in absence of it, there will be breach of conditions of insurance policy.

In view of above, appellant/Insurance Company is exonerated from its liability to satisfy the amount of compensation and the liability to satisfy the amount of compensation shall be upon non-applicants No.1 and 2 i.e. driver and owner of the offending vehicle. The Court further directed the insurance company to pay the amount as the insurance of the vehicle is not denied, it is insured as ‘Passenger Carrying Vehicle’ and later the insurance company must recover the same amount from the owner and driver of the offending vehicle.

In view of the above, appeal allowed partly and disposed off.[Oriental Insurance Company Ltd. v. Sudhir Kumar, 2020 SCC OnLine Chh 835, decided on 23-09-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Karnataka High Court: Ashok G. Nijagannavar, J., allowed the appeal and enhanced the compensation in light of the “pay and recover” principle.

The facts of the case are such that the deceased was travelling as a Cleaner in the lorry when the driver of the said lorry drove in a rash and negligent manner and dashed against another vehicle consequent to which the deceased sustained grievous injuries and later succumbed to it. The dependents filed a petition for compensation before the Motor Accidents Claims Tribunal i.e. MACT as the deceased was the main earning member of the family and due to his untimely death, the claimants lost financial support. The MACT thereby directed to pay the compensation of Rs 5,71,000 along with interest at the rate of 6% p.a. from the date of petition till its realization. Being aggrieved by the same, the petitioner’s claimants preferred the instant appeal under Section 173(1) Motor Vehicle Act i.e. MV Act for enhancement of compensation.

Counsel for the appellants submitted that on the date of the accident the insurance policy was in force. It was further submitted that as the driver of the offending vehicle had no valid and effective DL, the insurance company is liable to pay the compensation and recover it from the owner of the offending vehicle as per “pay and recover” principle.

Counsel for the respondents submitted that as the driver had no valid and effective DL, hence the insurance company has no liability to pay the compensation.

The Court relied on judgment titled Parminder Singh v. New India Assurance Company Ltd., (2019) 7 SCC 217 and observed that as per pay and recover principle the insurance company is liable to pay compensation to the victim and later recover it from the owner of the offending vehicle.

The Court thus held that the compensation granted vide impugned order is too meagre and disproportionate and in view of the ratio laid in National Insurance Company Limited v. Pranay Sethi, (2017) 16 SCC 680, compensation was enhanced.

In view of the above, petition was allowed and disposed off.[Geetha Bhai v. Amanullah, 2020 SCC OnLine Kar 1878, decided by 21-01-2020]


Arunima Bose, Editorial Assistant has put this story together

Case BriefsHigh Courts

Bombay High Court: Anil S. Kilor, J., decided an appeal wherein the claim petition was rejected by the Motor Accident Tribunal on certain grounds.

FACTS

Deceased Baby was traveling in a jeep owned by respondent 1. It has been stated that the vehicles’ driver was driving at a high speed and in a negligent manner resulting in a violent dash to a tree.

In view of the above incident, the husband of the deceased Baby and her two sons filed a claim petition under Section 166 of the Motor Vehicle Act claiming Rs 5,00,000 towards compensation.

Insurance Company |Breach of Condition of Insurance Policy

Respondent 2 i.e the Insurance Company resisted the claim by filing a written statement on the grounds that the driver of the offending vehicle was not holding a valid motor driving license on the date of the accident and the jeep was insured for private use but it was used for commercial purpose in breach of a condition of the Insurance policy.

Since the claim petition was rejected by the tribunal, the present appeal was filed.

Counsel for the appellants, P.R. Agrawal; K.B Zinjarde, Counsel for the legal representatives of respondent 1 owner of the offending vehicle and S.K. Pardhy, Counsel for the Insurance Company.

Analysis and Decision

Bench on perusal of the grounds of rejection by the tribunal examined the correctness and legality of the same.

Ground 1:

Claim is based on falsity

Registration of births, those who born in remote areas like the deceased Baby or the appellant 1, have a lesser likelihood of registration of their birth and possessing a birth certificate.

In absence of schools in remote tribal areas till the recent past, it was not possible to take education for many. Hence no school record in respect of date of birth is also available.

Therefore, there is a practice of mentioning the approximate age.

The Court found no ill-intention of the claimants in mentioning the age of the deceased as 38 years.

Hence, the rejection of the claim petition by the Tribunal on the ground that the case of the claimant is based on falsity is erroneous.

Ground 2:

Husband of the deceased Baby, being an earning member, cannot claim compensation for death of his wife in the accident

The deceased was a housewife, therefore, claimants have lost personal care and attention given by the deceased.

A housewife holds the family together. She is a pillar support for her husband, a guiding light for her child/children and harbor for the family’s elderly.

In regard to the importance of the role of a housewife, High Court referred to the decision of the Supreme Court in Arun Kumar Agrawal v. National Insurance Company Ltd., (2010) 9 SCC 218.

Further, the Court stated that,

“…the loss to the husband and children consequent upon the death of the housewife or mother has to be computed by estimating the loss of personal care and attention given by the deceased to her children as a mother and to her husband as a wife and further for loss of gratuitous and the multifarious services rendered by the housewives for managing the entire family.”

Hence, the claim of the claimants on the ground that the husband and the major sons are not entitled to claim compensation on the death of the wife or mother, appears to be in ignorance of the well-established principals of law.

In Court’s opinion, the deceased being a woman and mother of two children would have also contributed her physical labour for the maintenance of the household and also taking care of her children. Therefore, being a labourer and maintaining her family, her daily income should be fixed at Rs 200 per day and Rs 6000 per month.

Ground 3:

The private vehicle was used for commercial purposes in breach of conditions of the Insurance Policy moreover the driver was not holding a valid licence.

In view of the Supreme Court decision in S. Iyyapan v. United India Insurance Company Ltd., 2013 (6) Mh. L.J. 1 and this Court’s decision in Dnyaneshwar v. Raju, 2020(1) Mah. Law Journal 377, wherein it was held that it is the vicarious liability of the owner of the vehicle to pay compensation even if due to rash and negligent driving of the driver, the accident had occurred.

Thus, in view of the above-stated position, ground 3 was also rejected.

DECISION

High Court held that it is the statutory duty of the Insurance Company to pay the amount of compensation even in breach of a policy condition.

Court directed the Insurance Company to pay the compensation amount in three months.

In view of the aforesaid terms, the appeal was allowed. [Rambhau v. Shivlal, 2020 SCC OnLine Bom 935, decided on 17-09-2020]

Case BriefsHigh Courts

Rajasthan High Court: P.K. Lohra J., in an appeal under Section 173 of the Motor Vehicles Act, 1988 upheld the decision of the impugned judgment and directed the insurer to first pay the compensation amount to the claimants and then recover from the insured.

In the present case, the appellants being Megma HDI General Insurance Company Limited had appealed before the High Court challenging the judgment and award passed by the Motor Accident Claims Tribunal, Jodhpur. The Tribunal had absolved the appellants herein from the liability to pay compensation to the claimants and the onus was on the owner of the vehicle. However, it had directed the appellants to pay the compensation to the claimants first and thereafter claim the amount from the owner of the vehicle, the insured.

Challenging this above order, the counsel representing the appellants, Dhanpat Choudhary, placed reliance on the Supreme Court judgment National Insurance Co. Ltd. v. Swaran Singh, (2004) 3 SCC 297 and submitted that the tribunal erred in ordering the appellants to first pay the compensation to the claimants and thereafter recover it from the insured party.

The High Court, after perusal of the Tribunal’s order, referred to the Supreme Court judgments in Pappu v. Vinod Kumar Lamba, (2018) 3 SCC 208 and Amrit Paul Singh v. Tata AIG General Insurance Co. Ltd., (2018) 7 SCC 558 wherein it was held that in case of any loss to the third party, the insurer is first required to pay compensation to the claimants and then recover the same from insured. It stated that the Tribunal had absolved the appellants from the duty due to the insured party not complying with the insurance policy but in order to mitigate the hardship of the claimants, the Tribunal directed the appellants to recover the compensation amount from the insured after paying the same to the claimants. The appeal was dismissed.[Megma Hdi General Ins. Co. Ltd. v. Likhama Ram, 2019 SCC OnLine Raj 1292, decided on 05-07-2019]

Case BriefsHigh Courts

Madras High Court: Pushpa Sathyanaryana, J. while hearing a petition praying for mandamus against an insurance company, directed the said insurance company to honour the claim of petitioner in respect of her insurance policy.

Petitioner and her husband had applied for a home loan for which they were to be sanctioned a sum of Rs 35,00,000. The loan policy also covered critical illness diagnosis cost. Petitioner’s husband suffered a massive cardiac arrest and died. Petitioner filed a claim petition seeking claim amount but it was denied on grounds that her husband’s death was not covered under major medical illness. Aggrieved thereby, the instant petition was filed.

Learned counsel for the petitioner S.R. Raghunathan argued that the respondent’s argument which stated that massive cardiac arrest did not come under the purview of major medical diagnosis was absolutely false. They were just trying to save themselves from providing rightful insurance claims. He relied on the case of LIC of India v. Asha Goel, (2001) 2 SCC 160 to buttress his argument.

Learned counsels for the respondents S. Manohar and K.J. Parthasarathy contended that the respondent company was not “State” under Article 12 of Constitution of India and therefore the writ petition was not maintainable under law. Secondly, they alleged that the cause of death did not fall within the covered claims.

Issue: Whether a writ petition is maintainable to enforce a contractual right of an insurance claim?

The Court opined that Article 226 of the Constitution of India could be invoked not only for infringement of fundamental rights but also for any other purpose. Thus, the question that required determination was whether private bodies performing public duties can be brought within the purview of judicial review. It considered the judgment in LIC v. Escorts Ltd., (1986) 1 SCC 264 where the Supreme Court while considering activities of LIC, which comes under the purview of public law, observed that “a Court will examine actions of State if they pertain to the public law domain and refrain from examining them if they pertain to the private law field…. The question must be decided in each case with reference to the particular action”.

The Court remarked that notwithstanding the law on the subject, in reality, there is no parity and balance between the insurer and insured. In many cases, the individual has no legal knowledge about the ambiguous language used in the company’s policy with an intention to waive them from the liability to pay the injured on happening of an agreed event. Many times the companies willfully neglect reimbursing the insured, who instead of getting their amount from the company have to pay the Courts for getting their rights enforced. The case on hand is the classic example of the same.”

 It was opined that the “malpractice and arbitrary use of power by the insurance companies must be restrained by incorporating provisions to reduce the chances of ambiguity at a later date. Or else, the insurer would continue to take advantage of the insured by falsely repudiating the claims made by the insured”.

It was noted that as per Section 3 of the policy in question the medical event of ‘Myocardial Infarction’ was covered under the Policy. Though the cardiac arrest suffered by the husband of the petitioner fell under the abovesaid medical event, the respondents were denying the rightful claim to the insurance cover. The Court asked for a medical report to clear the doubt whether massive cardiac arrest comes under major medical diagnosis, and after a perusal of the said report, it was concluded that the cause of death of the insured was well within the defined medical events prescribed in the policy.

As a concluding remark, the Court urged that insurance companies must focus on educating their customers about the financial backing and this must be done by issuing magazines, booklets and visual contents.

The petition was allowed and the respondent company was directed to honour the claim made by the petitioner without insisting for any further documentation or particulars, in accordance with the law.[Jasmine Ebenezer Arthur v. HDFC ERGO General Insurance Company Ltd., 2019 SCC OnLine Mad 2246, decided on 06-06-2019]

Case Briefs

Jharkhand High Court: Anubha Rawat Choudhary, J. allowed an appeal made by an insurance company regarding their extent of liability towards a deceased as mentioned in the insurance policy.

An FIR was lodged by the owner of a vehicle wherein it was stated that a person (deceased) was authorized to drive his vehicle. In order to save a cow while driving, that person met with an accident and died. His legal representatives (the claimant) filed a claim application, but the insurance company denied its liability. Motor Accident Claims Tribunal (MACT) allowed the claimant’s application under Section 166 of Motor Vehicles Act, 1988 and held the insurance company liable to pay compensation of Rs. 11 lakhs with 6 per cent interest. Hence, this appeal.

Issue: Whether the deceased, who was authorized to drive the vehicle, by the owner of the vehicle, is covered under the insurance policy and if so, to what extent.

Learned counsel Ashutosh Anand, on behalf of the appellant submitted that the Tribunal did not consider the fact that the deceased was driving the vehicle with the permission of the owner so, he won’t be considered a 3rd party as he stepped into the shoes of the owner and thus claimant would be entitled to compensation only after proving that there was no rash driving or negligence on the part of the deceased.

Learned counsel  K. K. Singh, on behalf of the respondent submitted that the point raised by the appellant were raised for the first time and not mentioned in its written statement. It was further contended that the appellant did not make any plea about their extent of liability before the Tribunal and referred to a judgment of Supreme Court Ramchandra v. Regional Manager, United India Insurance Company Ltd., (2013) 12 SCC 84, in which it was rightly held that the appellant was estopped from raising the plea for the first time at the appellant stage.

The Court noted that there was no rash and negligent driving on the part of the deceased as per the police report. It was noted that the reason for the appellant’s denial of its liability to pay compensation, was that the deceased was neither a 3rd party nor a paid driver of the insured owner. It was opined that the liability of the appellant under the policy would be governed by the terms and conditions of the insurance policy. The insurance policy did not cover the list of any gratuitous passenger and no additional premium for such coverage was paid by the insured against the policy.

It relied on the judgment in United India Insurance Co. Ltd. v. Sidharat Raju, 2014 SCC OnLine P&H 3117 where it was held that the deceased steps into the shoes of the owner of the vehicle, and therefore the claimant cannot be said to a third party for the purposes of awarding compensation under the Act. Further reliance was placed on National Insurance Company Ltd. v. Ashalata Bhowmik, (2018) 9 SCC 801 where it was held that liability of an insurance company would be only to the extent of personal accident coverage under the contract of insurance.

In view of the aforesaid decisions, it was held that the extent of liability of the appellant could only be 2 lakhs with 6 percent interest from the date of filing the petition till the payment is made.[TATA AIG General Insurance Co. Ltd. v. Shakuntala Ganeriwal, 2019 SCC OnLine Jhar 642, decided on 25-04-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): Justice V.K. Jain (Presiding Member) dismissed an appeal filed by a jeweller, assailing repudiation of his claim for insurance.

The complainant/appellant obtained a Jewellers Block Policy from the respondent company for Rs 48 lakhs. During the period of the policy, some burglars entered their jewellery shop and took away ornaments kept in a safe. Respondent was intimated and a surveyor was appointed to visit the site and assess the loss. Surveyor submitted a report recommending repudiation of the claim on the ground that there was no sign of breaking the safe or its locks. Aggrieved appellant approached the State Commission by way of a consumer complaint. State Commission dismissed the complaint on the ground that the insured had failed to take all reasonable steps for safety of the property.

NCDRC noted an exception clause in the policy which stated that if it is established that the safe had been opened by the intruders, using either the original or a duplicate key of the safe belonging to the complainant, the loss would not be covered unless it is shown that the key, or duplicate key, as the case may be, had been obtained by threat or by violence. In the present case, the alleged use of key belonging to the insured was based upon the fact that one key of the safe was found in a glass showcase underneath a weighing scale. It was opined that in the normal course of human conduct, burglars would either take away the key or just throw it somewhere in the shop, instead of making efforts of keeping it under a weighing scale inside the glass showcase.

The Commission further noted that it was a condition of the policy that the premises where the jewellery was kept were to be protected by employing a watchman. But the said condition had not been met by the appellant.  Lastly, the appellant was not maintaining proper books of accounts and had failed to prove the actual loss suffered by him.

For the aforesaid reasons, it was held that the order of State Commission, dismissing the complaint filed by the appellant, did not call for any interference by this Commission.[S.B. Jewellers v. United India Insurance Co. Ltd., First Appeal No. 154 of 2013, Order dated 04-04-2019]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Division Member Bench of Anup K Thakur, C. Viswanath, Members, dismissed a complaint filed against the opposite party for claiming compensation for alleged deficiency of services.

The main issue that arose before the Commission was whether the opposite party was liable for deficiency of services under the provisions of Consumer Protection Act, 1986.

The Commission observed that the complainant had intimated the opposite party about the breakdown of its machinery a month after it actually broke down. Further, the complainant was regularly communicating with the opposite party but even then it did not provide any information to the opposite party via email or telegram about the break down of machinery and this omission on the part of the complainant was a violation of one of the provisions of the insurance policy. The Commission also observed that soon after taking Machinery Breakdown and Machinery Loss of Profits Policies, the machinery of the complainant broke down. Complainant’s omission to disclose that the machinery was giving trouble prior to the complainant taking insurance policy, is an active concealment on its part. Further, the complainant had dismantled the machinery before it was examined by the surveyor and it also made an excuse about the logbooks gone missing.

The Commission held that the composite result of all the actions on the part of the complainant clearly suggests that the complainant had deliberately concealed some vital facts from the opposite party and hence it cannot be allowed to derive benefits of an insurance policy obtained by concealment of such important facts. Resultantly, the complaint was dismissed by the commission holding the opposite party not liable for deficiency of services under the provisions of the Consumer Protection Act, 1986. [Amrit Environmental Technologies (P) Ltd. v. Cholamandalam MS General Insurance Co. Ltd.,2018 SCC OnLine NCDRC 381, order dated 09-10-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): A Single Judge Bench comprising of V.K Jain, J., dismissed a consumer plaint for claim of insurance.

The respondent owned a vehicle which was insured with the petitioner company for which he claimed reimbursement in respect of the loss suffered by him on account of damage to the vehicle but as the driver of the vehicle was under the influence of intoxicating liquor at the time of accident, the company denied the claim by stating the respondent’s liability under Section 1(c) of the insurance policy,  which states that insurer is not liable in case of any accidental loss or damage suffered whilst the insured or any person driving the private car with the knowledge and consent of the insured was under the influence of intoxicating liquor.

After being dismissed by the District Forum, the claim was finally allowed by the State Commission by way of an appeal and as a resultant, the petitioners filed for a revision.

The prime point for consideration was as to when a person can be regarded under the influence of alcohol in order to hold him guilty for his respective act. The Court appraised Lyon’s Medical Jurisprudence and Toxicology report whereby the Blood alcohol of 0.10% was accepted as prima facie evidence of alcoholic intoxication with the prescribed limit for permissible blood alcohol in India being 30mg/100 ml of blood. This was read in consonance with the AIIMS report which expressed that if the quantity of alcohol in the blood was 100 or more mg. /dl (100 ml), it led to blurred vision, unsteady gait and ill coordination.

In this case, the alcohol content of the driver was 103.14 mg /100 ml of his blood, which clearly indicates the influence of liquor at the time he died or got injured taking into account the national limit for permissible blood alcohol.

The Court was of the view that the purpose of the insurer behind excluding such cases was to ensure that the consumption of the liquor did not contribute to the accident. Hence the impugned order was set aside. [Royal Sundaram General Insurance Co. Ltd. v. Davubhai Babubhai Ravaliya, 2018 SCC OnLine NCDRC 372, order dated 04-09-2018]

Case BriefsTribunals/Commissions/Regulatory Bodies

National Consumer Disputes Redressal Commission (NCDRC): The Bench comprising of R.K. Agarwal, J., M. Shreesha, Member, dismissed the revision petition filed against the order of Haryana State Consumer Disputes Redressal Commission.

The respondent had purchased an insurance policy from Oriental Insurance Company which was valid till 28-12-2015, however, the respondent had requested for renewal of the said policy and subsequently, the petitioner-bank had deducted a sum of Rs. 4,726/- from respondent’s account for preparing a draft in favour of the insurance company. The draft was not submitted to the insurance company and hence the policy expired. Thereafter, petitioner’s wife met with an accident and the petitioner had to spend Rs. 3,50,000/- for his wife’s treatment.

The Commission, in this case, observed that the fact about the existence of the demand draft was not contested by the petitioner-bank, neither it was denied that they had deducted Rs. 4,726/- from respondent’s account. Had the draft been deposited in time, the policy would have been renewed and the expenses incurred by petitioner would have been covered by the policy.

The Commission held that since the petitioner-bank had deducted the amount and also prepared the draft but did not give it to the insurance company, this amounted to deficiency in services on the part of the petitioner bank. The Commission upheld the order of the state commission, directing petitioner to pay Rs. 3,10,000/- to the respondent as compensation on account of deficiency of services. [Oriental Bank of Commerce v. Rajesh Kumar,2018 SCC OnLine NCDRC 307, order dated 30-07-2018]