Mr. B.K. Taimni, Member—Appellant was the opposite party before the State Commission, where the respondent/complainant had filed a complaint alleging deficiency in service on the part of the appellant.

2. Undisputed facts of the case are that the respondent/complainant owned a truck, which was covered by the risk through the policy issued by the appellant. The said truck met with an accident during the life of the policy. The matter was reported to the appellant as also to the police. The Surveyor was appointed, who after discussing it with the complainant, recommended the claim to be settled at Rs. 1,60,000 on cash-loss basis. Even this was not paid and the claim was repudiated by the appellant on the ground that the vehicle was carrying 12 unauthorised persons in the truck, in violation of the terms and conditions of the insurance policy. It is in these circumstances, a complaint was filed before the State Commission, who after hearing the parties, allowed the complaint and directed the appellant to pay Rs. 1,60,000 along with interest @ 18% p.a. from the date of filing of this complaint till the amount is actually paid to him. Aggrieved by this order this appeal has been filed.

3. It is vehemently argued by the learned Counsel for the appellant that since the truck was carrying more than permitted passengers, as per the report of the Investigator, it was violative of the terms and conditions. The appellant cannot be made liable for indemnifying the loss to the complainant.

4. We have gone through the material on record and also heard the arguments advanced by the learned Counsel and found that as per the finding returned by the State Commission, 9 passengers were travelling in the truck, whose names have been named in the F.I.R. before us. The report of the Investigator appointed by the appellant has been shown to us, according to which 12 passengers were travelling. Perhaps either this report was not produced before the State Commission or it was not argued before them as we see no reference to it in the order passed by the State Commission. Be that as it may, the Hon’ble Supreme Court has held that upto about 6 people could travel in a truck without making such difference. In this case if 9 people were travelling at best it could be said to be violation of the conditions of the policy and the claim need to be settled at non-standard basis. As per ‘guidelines’ issued under the ‘Claim Procedural Manual’. Item No. 10 of Procedure Manual of MOTOR CLAIMS for settling such claim on non-standard basis, reads as under:

Item No. 10 : Non-standard claims

“Following types of claims shall be considered as non-standard and shall be settled as indicated below after recording the reasons:

S. No.

Description

For Passenger Vehs Percentage of settlement

1 (iv)

Under declaration of authorised seating capacity

Deduct three years difference in premium from the amount of claim, if the difference between authorised seating capacity or that declared for insurance and the number of passengers carried at the time of loss is 10%. or less

Where the difference is more than 10% deduct three years difference in premium or 25% of the claim amount, whichever is higher from the amount of claim subject to maximum deduction of Rs. 20,000.

10(v)

Overloading of vehicle beyond authorised seating capacity

(a)

Where excess passengers are beyond the authorised carrying capacity by limit of 10% thereof

Deduct three years difference in premium from the amount of claim.

Where excess passengers carried are beyond authorised seating capacity exceeding10% thereof

Deduct three years difference in premium or 25% of the admissible claim whichever is higher subject to maximum deduction of Rs. 20,000

(emphasis supplied)

5. We have also seen the report of the Surveyor who has assessed the loss on cash-loss basis at Rs. 1,92,904. In view of the guidelines referred to above, in view of the violation of the conditions of the policy mentioned earlier, the Insurance Company, at best, co