Judicial Analysis Court Copy Headnote Facts Arguments Court observation

NATIONAL CONSUMER DISPUTES
REDRESSAL COMMISSION, NEW DELHI
Hon’ble Mr. Justice M.B. Shah, President;
Mr. Rajyalakshmi Rao, Member
Oriental Insurance Co. Ltd.—Appellant
versus
Kerala Aviation Training Centre & Ors. —Respondents
First Appeal Nos. 454 to 456, 460, 461, 493 of 2002—Decided on 31.1.2006

Advocates:
Counsel for the Parties :
For the Appellant :Mr. Vishnu Mehra, Advocate.
For the Kerala Aviation Training Centre :Mr. Ramesh Babu, Advocate.
For the other Respondents:Mr. P. Vinod Kumar, Advocate.

The main legal point established in the judgment is the requirement to interpret the terms of the insurance policy in favor of the insured in case of ambiguity and the need to establish facts beyond doubt to apply exclusion clauses.

Headnote:
Insurance - Aircraft Accident - Exclusion Clause - [LOSS OF LICENCE] - [AIRCRAFT ACCIDENT] - [Aircraft Act, 1934, Section 7(1)(b); Aircraft Rules, 1937, Rule 17(1)(iv)] - The court analyzed the insurance policy, exclusion clause, and the evidence to determine the liability of the Insurance Company in an aircraft accident case. The court found that the exclusion clause did not apply as the aircraft was used for training purposes and the Insurance Company failed to establish that the aircraft was used for aerobatic exercises. The court dismissed the appeals filed by both the complainants and the Insurance Company.
Fact of the Case:

The aircraft, used for a demonstration flight, crashed resulting in the death of the pilot and co-pilot. The Insurance Company repudiated the claims based on the exclusion clause in the insurance policy. The State Commission directed the Insurance Company to pay compensation to the complainants.
Finding of the Court:

The court found that the exclusion clause did not apply as the aircraft was used for training purposes and the Insurance Company failed to establish that the aircraft was used for aerobatic exercises. The court dismissed the appeals filed by both the complainants and the Insurance Company.
Issues: The issues involved the interpretation of the insurance policy, the applicability of the exclusion clause, and the liability of the Insurance Company in an aircraft accident case.
Ratio Decidendi: The court held that the exclusion clause did not apply as the aircraft was used for training purposes and the Insurance Company failed to establish that the aircraft was used for aerobatic exercises. The court also emphasized the requirement to interpret the terms of the policy in favor of the insured in case of ambiguity.
Final Decision: The court dismissed the appeals filed by both the complainants and the Insurance Company. There shall be no order as to costs.

ORDER

I. Brief Facts :

Mr. Justice M.B. Shah, President—Aircraft Cesna FA-152, a two-seater, took off at 16.25 hrs. with Captain Raj Kumar as Pilot and Mr. Satish Radhakrishnan as Co-pilot, for a demonstration flight on 22.2.1997 for the ‘Fly in 1997’ Convention which was organised jointly by the Government Flying Training School (GFTS), Bangalore, and the Agni Aerosports Adventures Pvt. Ltd., and immediately thereafter hit the ground and burst into flames. The occupants of the air craft, namely, Capt. Raj Kumar, Pilot and Mr. Satish Radha Krishnan, Co-pilot succumbed to injuries.

2. It is also pointed out that Kerala Aviation Training Centre (hereinafter referred to as the KATC) had taken an insurance policy, namely, “The Aircraft Hull/Liabilities Policy”.

3. The Insurance Company repudiated the claims preferred by the KATC and the legal heirs of the deceased Pilot and the Co-pilot for reimbursement/compensation, on the sole ground that the aircraft was used for aerobatic exercises. Hence, the complainants filed complaints before the State Consumer Disputes Redressal Commission, Kerala, against the Oriental Insurance Company Ltd. Since the incident in all these complaints is the same, these complaints were dealt with by the State Commission by a common order and judgment dated 3.10.2002. The State Commission directed the Insurance Company in:

(i)

O.P. No. 43 of 1998 which was filed by the heirs of the deceased Pilot, Rajkumar, to pay to the heirs of the deceased, Raj Kumar, a sum of Rs. 6 lakhs with interest at the rate of 9% p.a. from 18.2.1998 till the payment or recovery;

(ii)

O.P. No. 44 of 1998 which was filed by the heirs of Satish Radhakrishnan, the deceased Co-pilot to pay to the heirs of the deceased Satish Radhakrishnan a sum of Rs. 6 lakh with interest at the rate of 9% p.a. from 18.2.1998.

(iii)

O.P. No. 85 of 1998 which was filed by the KATC to pay Rs. 8,80,000/- with interest at the rate of 9% p.

a. from 18.2.1998 to the complainant, KATC;

In addition to the above amounts, the Insurance Company was also directed to pay costs, in all the cases, assessed at Rs. 3,000/- to each of the complainants.

4. Against that common judgment and order of the State Commission dated 3.10.2002, the following Appeals are filed by the Insurance Company and by the complainants before this Commission:

(i)

F.A. Nos. 454-456 of 2002 are filed by the Oriental Insurance Company Ltd. against the complainants praying for dismissal of the complaints;

(ii)

F.A. No. 460 of 2002 is filed by the heirs of the deceased, Satish Radhakrishnan against the Insurance Company;

(iii)

F.A. No. 461 of 2002 is filed by the heirs of the deceased, Rajkumar against the Insurance Company; and

(iv)

F.A. No. 493 of 2002 is filed by the KATC is filed against the Insurance Company —

praying for enhancement

of the compensation.

II. Contentions of the Complainant:

Loss of Licence - Insurance coverage:

5. At the outset, we deal with the contention of the complainants with regard to the reimbursement for ‘loss of licence’ as per the Loss of Licence Insurance Coverage. In our view, a bare reading of the insurance policy reveals that reimbursement under this policy is for loss of licence due to bodily injury during or after the period of insurance and compensation for such bodily injury is provided by Term Nos. 1, 2, 3, 4, and 5. In all these cases, except Item No. 5, there is a specific mention of incapacity causing permanent total disablement or incapacity causing temporary total disablement. Item No. 5 deals with insured being required to attend any Court of Inquiry which in the opinion of the Insurance Company might give rise to a claim under the insurance policy. Thereafter, the definition clause provides as under:

“Definitions:

Incapacity: Any incapacity causing the permanent total disablement or temporary total disablement of the person insured.

Permanent total disablement : Any disablement due to personal injury or to illness, disease or disability including natural deterio

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The main legal point established in the judgment is the requirement to interpret the terms of the insurance policy in favor of the insured in case of ambiguity and the need to establish facts beyond doubt to apply exclusion clauses.

Cases Referred (5)