IMPORTANT POINT
For provisions of Indian Motor Tariff 47 to be applied, it is essential to establish that loss or damage was caused due to overturning and that overturning should arise out of operation as a tool of such vehicle.

JUDGMENT :

Dhananjaya Y. Chandrachud, J.

1. Leave granted.

2. This appeal arises from a judgment dated 12 July 2019 of the National Consumer Disputes Redressal Commission.,¹[“NCDRC”] While exercising its revisional jurisdiction, the NCDRC, by its judgment, reversed concurrent findings of fact which were recorded by the District Consumer Disputes Redressal Forum,²[“District Forum”] and by the State Consumer Disputes Redressal Commission.,³[“SCDRC”].

3. The appellant purchased a JCB Excavator Model 3DX on 25 April 2007. The excavator was insured with the respondent for the period between 5 March 2009 and 4 March 2010 at an Insured Declared Value,⁴[“IDV”] of Rs. 13.50 lakhs. On 25 May 2009, the excavator was being used on the Shivpuri-Timli Road near Rishikesh in the State of Uttarakhand. A portion of the road gave way, as a result of which the excavator fell into a deep ditch resulting in the death of the operator and helper and the total loss of the excavator. A First Information Report was filed on 26 May 2009. The FIR states that the accident had occurred due to a sudden caving of the road. The surveyor appointed by the insurer conducted a spot survey on 28 May 2009 and reported that the accident had taken place due to the edge of the road side collapsing due to which the excavator fell into a ditch. The final survey report was submitted on 18 July 2009. The appellant filed for an insurance claim but the insurer did not settle it. The respondent repudiated the claim on 13 April 2010 on the ground that the overturning of the excavator was not covered in terms of the policy condition Indian Motor Tariff,⁵[“IMT”] 47 as the JCB excavator was being used as a “tool of trade” and no additional premium was paid. The appellant filed a complaint before the District Forum alleging a deficiency in service on the part of the insurer and the award of a sum of Rs. 13.50 lakhs towards the IDV plus interest at twelve percent, along with compensation for mental harassment. The District Forum allowed the complaint on 26 September 2011 by directing the insurer to pay an amount of Rs. 13.50 lakhs, together with interest at nine per cent. The judgment of the District Forum was upheld in appeal by the SCDRC on 1 May 2014. On the issue of IMT 47, The SCDRC made the following observations :

“9. So far as another plea taken by the insurer that at the time of the accident, the machine, was being used as “Tool of Trade”, for which additional premium was required to be paid by the complainant and which was not paid by the complainant is concerned, we also do not find any force in the said plea raised by the insurer. The reason being that as per IMT 47 mentioned in the insurance policy and which has also been quoted by the District Forum in the impugned order, the claim is not payable in the event when the JCB machine is used as tool of Trade and it overturns while working as such. In the instant case, the JCB machine was being used for construction of road and debris was being removed from the machine. The JCB machine was being used a whole and not as “Tool of Trade” and since the machine was being used a whole, no additional premium was required to be paid by the complainant.”

The respondent assailed the order of the SCDRC in Revision Petition No. 3306 of 2014. The NCDRC, by its judgment dated 12 July 2019, reversed the findings and the award of compensation by the SCDRC. The NCDRC reversed the decision on the ground that earth moving equipment, such as a JCB excavator, could be used either as a tool or as a vehicle, at a given point of time. Since the case of the respondent was that the excavator was being used for the purpose of road making when it met with an accident, the NCDRC held that it was being used as a tool and not as a vehicle. In arriving at its findings, the NCDRC upheld the submissions of the insurer that the claim could not have been allowed under IMT 47 unless additional premium was paid. The relevant observations of the NCDRC are extracted