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PUNJAB STATE CONSUMER DISPUTES
REDRESSAL COMMISSION, CHANDIGARH
Hon’ble Mr. Justice A.L. Bahri, President;
Mr. Jasbir Singh & Mrs. Davinder Kaur Bhamrah, Members
NATIONAL INSURANCE COMPANY LIMITED—Appellant
versus
SUDARSHAN KUMAR—Respondent
Appeal No. 991 of 1997—Decided on 19.1.1999
Counsel for the Parties :
For the Appellant :Mr. Munishwar Puri, Advocate.
For the Respondent: None.
The main legal point established is that the insurance company is liable for the theft of the insured vehicle, and parking the vehicle outside the limit of the route permit does not constitute a breach of the insurance contract.
Headnote:
Insurance - Vehicle Insurance - Breach of Policy Conditions - Theft of Vehicle - Assessment of Loss - Interest Rate on Compensation
Fact of the Case:
The National Insurance Company was directed to pay the insured amount along with interest for the theft of a vehicle that was insured but stolen. The insurance company repudiated the claim citing breach of policy conditions as the vehicle was being plied as a taxi outside the limits of the route permit granted.
Finding of the Court:
The court found that the theft occurred when the vehicle was parked and not being plied, therefore, there was no breach of policy conditions. The insurance company's repudiation was held to be arbitrary and the company was held liable for the theft. The court also noted that the assessment of loss by the surveyor was Rs. 1 lac, and the insurance company was liable to pay the same.
Issues: The issues involved breach of policy conditions, assessment of loss, and the applicable interest rate on compensation.
Ratio Decidendi: The court held that parking the vehicle outside the limit of the route permit cannot be considered a breach of the insurance contract. The insurance policy covered loss by theft, and the repudiation by the insurance company was deemed arbitrary. The court also applied the decision of the Supreme Court regarding the interest rate on compensation against nationalized insurance companies.
Final Decision: The appeal was partly allowed, and the insurance company was directed to pay a sum of Rs. 1 lac with 12% interest from a specified date until payment.
Mr. Justice A.L. Bahri, President—This appeal is by the National Insurance Company Limited challening order of District Forum, Hoshiarpur dated September 11, 1997 directing appellant to pay Rs. 1,30,000/-, the insured amount, alongwith interest thereon @ 18% p.a. from filing of the complaint, i.e. June 11, 1997 till payment to Sudarshan Kumar, owner of the vehicle (Van No. PB-07-B 2981). The vehicle was insured for a sum of Rs. 1,30,000/-. The vehicle was stolen from Panchkula on December 21, 1995 that a claim was lodged with the Insurance Company and the same was repudiated on the ground that there was breach of terms and conditions of the policy as the vehicle was being plied as a taxi outside the limits of the route permit granted. Hence, the complainant approached the District Forum. Similar plea was taken by the Insurance Company as mentioned above before the District Forum. On the evidence produced by the parties, the impugned order was passed.
2. The facts narrated, as are clear from F.I.R. No. 340 lodged with the police, are that some passengers were taken to Panchkula from Hoshiarpur and the vehicle was parked outside the hotel and was found missing in the morning. As per allegations, the passengers who had hired the vehicle, after stealing the key from pocket of the driver, committed theft of vehicle. The fact remains that at the relevant time of the commission of theft, the vehicle was not being plied and was parked. Since the vehicle was parked, there was no question of breach of any terms and conditions of the policy. Parking of the vehicle outside the limit of the route permit cannot be considered as breach of contract of insurance. The insurance policy is a comprehensive policy covering loss by theft. Thus, the contention of Counsel for the appellant Insurance Company that repudiation was bona fide cannot be accepted. The repudiation was arbitrarily made and in case of theft of the vehicle, the Insurance Company is held to be liable.
3. Learned Counsel for the appellant has argued that since Surveyor assessed the loss at Rs. one lac, the Fora was not justified in granting the entire insured amount of Rs. 1,30,000/-. There is force in this contention. When Surveyor was appointed to assess the loss, who after considering model of the vehicle stolen had assessed the total loss at Rs. 1 lac, the Insurance Company was liable to pay the same. If the complainant was not satisfied with such assessment, he could have approached the Civil Court. As far as the Fora established under the Consumer Protection Act is concerned, on payment of such loss as assessed by the Surveyor, there would be no deficiency left on the part of the Insurance Company.
In view of the decision of Supreme Court in United India Insurance Company v. M.K.J. Corporation, III (1996) CPJ 8 (SC), compensation by way of interest against the nationalised Insurance Company is not to be more than 12% p.a. That being the position, this appeal is partly allowed. The order of the District Forum is modified with the direction to the Insurance Company to pay a sum of Rs. 1 lac with 12% interest thereon w.e.f. 9.1.1997 (allowing three months’ time from the report of Surveyor to settle the claim), till payment.
Appeal partly allowed.
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