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MAHARASHTRA STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, BOMBAY
Hon’ble Mr. Justice G.G. Loney, President &
Smt. Ellen Dharkar, Member
NITIN—Complainant
versus
THE NEW INDIA ASSURANCE COMPANY LTD. & ANR.—Opp. Parties
Complaint No. 53 of 1991—Decided on 24.12.1993
An insurance company is liable to pay the full value of the policy amount for the total loss of a vehicle, minus depreciation, even if the vehicle was purchased for commercial purposes, there is an arbitration agreement, or the complainant was carrying more passengers than the seating capacity.
Headnote:
CONSUMER PROTECTION ACT - INSURANCE - SECTION 13 - DEFICIENCY IN SERVICE - INSURANCE COMPANY LIABLE TO PAY FULL VALUE OF POLICY AMOUNT MINUS DEPRECIATION FOR TOTAL LOSS OF VEHICLE.
Fact of the Case:
Complainant alleged deficiency in service by the insurance company for not settling his claim for the total loss of his insured Maruti van in an accident. The insurance company denied liability, claiming that the vehicle was purchased for commercial purposes, there was an arbitration agreement, and the complainant was carrying more passengers than the seating capacity.
Finding of the Court:
The court held that the complainant was entitled to the full value of the policy amount minus depreciation for the total loss of his vehicle. The court rejected the insurance company's objections that the vehicle was purchased for commercial purposes, there was an arbitration agreement, and the complainant was carrying more passengers than the seating capacity.
Issues: 1. Whether the insurance company was liable to pay the complainant the full value of the policy amount for the total loss of his vehicle? 2. Whether the complainant's claim was barred by the arbitration agreement in the insurance policy? 3. Whether the complainant was carrying more passengers than the seating capacity of the vehicle?
Ratio Decidendi: 1. The court held that the insurance company was liable to pay the complainant the full value of the policy amount for the total loss of his vehicle because there was no evidence to support the insurance company's objections. 2. The court held that the complainant's claim was not barred by the arbitration agreement in the insurance policy because the complainant had the right to approach the consumer forum for redressal of his grievance. 3. The court held that there was no evidence to support the insurance company's objection that the complainant was carrying more passengers than the seating capacity of the vehicle.
Final Decision: The court allowed the complaint and directed the insurance company to settle the complainant's claim for the amount of Rs. 80,000/- to be paid within 30 days from the receipt of the order. The court also awarded the complainant Rs. 500/- as costs.
Mr. Justice G.G. Loney, President—This is a complaint is which the complainant alleged the deficiency in the service of the opposite party namely the New India Assurance Co. Ltd. The complainant alleged that his maruti van bearing registration No. MTV- 7718 was insured with the opposite party on 11.4.1989. The complainant paid Rs. 1229/-towards premium and the insurance policy was valid from 11.4.89 to 10.4.1990. The insurance policy was for the sum of Rs. 80,000/-. On 16.11.1989 maruti van met with an accident in Yevatmal Distt. and the accident was reported to nearest Police Station at Ladkhed in Yevatmal Dist. The intimation of the accident was given to the opposite party and a claim was submitted in November 1989. Thereafter the complainant completed all the requirements as per the queries made by the opposite party upto the end of December, 1989. The complainant alleged that since there is no response from the opposite party, a notice dtd. 13.8.90 was issued to the Regional Office at Pune including the head office at Bombay. The complainant alleged that the aforesaid taxi was being used as taxi out of loan and because of total loss of taxi he suffered very much. The complainant therefore filed the present complaint claiming the amount of policy of Rs. 80,000/-, interest, notice charges and Rs. 45,000/- towards loss of earning and compensation for suffering and penalty. Thus, the total claim of Rs. 2 Lakhs has been made by the complainant. In response to the notice sent to the opposite party under Sec. 13 of Consumer Protection Act. The opposite party filed its written version denying the complainant’s claim. Inter-alia the opposite party alleged that the vehicle was purchased for commercial purpose with restricted seating capacity of 3 + 1 only, and also submitted that since there is an arbitration agreement, the complaint is not maintainable. The contention raised by the opposite party is that the matter is pending for adjudication before the Motor Accident Claims Tribunal at Yevatmal and therefore this Commission has no jurisdiction. Another contention raised by the opposite party is that the complainant was carrying more passengers than the seating capacity of vehicle. Lastly, it is contended that the complainant has exaggerated his claim for compensation.
2. We have given our anxious consideration to the allegations made in the complaint and the defence raised by the insurance company.
3. The vehicle in question was insured for the sum of Rs. 80,000/- and has been totally damaged in the accident is an admitted fact. Coming to the technical objection raised by the opposite party that the complainant has purchased a vehicle for commercial purpose and therefore the claim is not maintainable before this Commission is absolutely irrelevant and incorrect. Since this is the complainant alleging the deficiency in the service of the insurer, the “commercial purpose” is totally irrelevant. The legal bar to take out the consumer complaints out of purview of the Consumer Protection Act on the basis of “commercial purpose” is relevant only respect of the goods purchased by the parties. So far as the deficiency in the service is concerned, the commercial purpose is totally irrelevant. Another contention raised by the opposite party is that there is arbitration agreement which provides the parties under the insurance policy to refer the dispute to arbitrator and therefore, this complaint is not maintainable is also not correct. The National of Commission in number of cases has held that despite the agreed terms for reference to the arbitration between the parties, the consumer can approach the consumer fora for the redressal of his grievance if there is any deficiency in the service of an insurer.
4. Coming to the next contention raised by the opposite party is that it was a tourist taxi and the complainant was carrying the passengers more than the seating capacity of 3 + 1. There is no evidence before us tendered by the Insurance
