An insurance company is liable to pay the full value of the policy amount for the total loss of a vehicle, even if there is an arbitration agreement between the parties, provided that there is no evidence to support the insurance company's claims that the vehicle was purchased for commercial purposes or that the complainant was carrying more passengers than the seating capacity.

Mr. Justice G.G. Loney, President—This is a complaint in 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 11.4.89. The complainant paid Rs. 1229/- towards premium and the Insurance Policy was valid from 11.4.89 to 10.4.90. the Insurance Policy was for the sum of Rs. 80,000/-. On 16.11.89 Maruti van met with an accident in Yevatmal Distt. and the accident was reported to nearest Police Station at Ladakh in Yevatmal Distt. 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 up to the end of December, 1989. The complainant alleged that since there is no response from the opposite party, a notice dated 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 lakhshas been made by the complainant. In response to the notice sent to the opposite party under Section 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 contented 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 defense 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 takeout the consumer complaints out of purview of the Consumer Protection Act on the basis of “commercial purpose” is relevant only in 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 Commission in number of cases has held that despite the agreed terms for reference to the arbitration between the parties, the cons jmer 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 Insura