Mere breach of an exclusion clause in an insurance policy does not absolve the insurer of liability unless the insured is guilty of committing a breach of term in the contract of insurance.

Mr. Justice R.C. Mankad, President — Complainant owned a "Bajaj Tempo Matador Taxi" bearing Registration No. GJ-9-T-1050 (vehicle for short). The vehicle was purchased for Rs. 2,10,000/- and it was hypothecated with Himatnagar Nagrik Sahkari Bank Limited to secure loan of Rs 1,43,000/- advanced to the complainant. The vehicle was insured for Rs. 2,10,000/- with the opponent-National Insurance Company Limited and the insurance was valid for the period from May 4,1993 to May 3,1994. The vehicle carrying passengers met with an accident on September 16,1993. It is alleged that a tanker coming from the opposite direction collided against the vehicle on highway between Himatnagar and Shamlaji. The accident is alleged to have occurred on account of rash and negligent driving on the part of the driver of the truck. About 10 to 12 passengers travelling by the vehicle died on the spot and others were injured. Driver of the vehicle lodged complaint with Gatrohi Police Station against the driver of the tanker. According to the complainant, the vehicle was a total loss.

2. The complainant gave intimation regarding the accident to the opponent who appointed K.B. Joshi as Surveyor to assess the loss. Later on A.S. Rathod was appointed to survey the loss. It is the case of the complainant that he submitted all the information and documents as required by the Surveyors. The Surveyor A.R. Rathod recommended to settle the claim for Rs. 1,90,000/- on total loss basis. The complainant agreed to accept this recommendation and gave consent letter to the Surveyor on October 13,1993. The salvage of the vehicle was to be preserved till the opponent took decision regarding the complainant's claim.

3. The opponent, however, did not take decision for a long time inspite of requests made by the complainant. On June 27,1994 the opponent wrote letter repudiating the complainant's claim on the ground that the vehicle was carrying more passengers than its capacity. It is submitted that if the driver of the vehicle took additional passengers without the knowledge of the complainant, the complainant could not be said to have committed breach of the terms of the policy. It is further submitted that mere violation of permit would not absolve the opponent. It is, therefore, submitted that the opponent is guilty of deficiency of service in repudiating the complainant's claim. According to the complainant, after the claim was repudiated by the opponent, salvage of the vehicle was sold for Rs. 22,000/-. The complainant has therefore filed this complaint for recovery of Rs. 1,88,000/- under the insurance policy and compensation as stated in paragraph 10 of the complaint.

4. The complaint is resisted by the opponent by written statement Exh. 7. The main contention which is raised in the written statement is the same on which the complainant's claim was repudiated. It is submitted that the vehicle could not have carried more than six persons including a driver. The vehicle, however, carried large number of passengers and there was clear violation of the permit granted by the R.T.O. and the conditions of the policy. The opponent has also denied the complainant's right to claim any amount under insurance policy or compensation as stated in the complaint. It is submitted that the opponent was justified in repudiating the complainant's claim and therefore, the complaint is not maintainable.

5. The facts that the vehicle was insured with the opponent and that it met with the accident as stated in the complaint are not denied by the opponent. The ground on which the claim is repudiated and contested is that the complainant had violated the conditions of permit and the insurance policy. The certificate of registration (Annexure-A page 18) shows that the sitting capacity of the vehicle was 6+1 (driver). Thus, the sitting capacity of the vehicle as per the registration certificate was in all seven persons. The complainant was granted contract carriage permit for the vehicle on M