The main legal point established in the judgment is the application of guidelines for settlement of non-standard insurance claims, which provided for reduced settlement amounts in cases of overloading of vehicles beyond licensed carrying capacity.

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. Very briefly the facts of the case are that the complainant was the owner of Maxi-cab which met with an accident and preferred a claim which was repudiated by the Insurers, on the ground that the vehicle was carrying excess passengers as also the driver did not have effective driving licence. It is in these circumstances, that a complaint was filed before the State Commission, who after hearing the parties, directed the appellant to pay Rs. 5,45,000 along with interest @ 12% p.a. and a compensation of Rs. 15,000 and Rs. 3,000 as costs. Aggrieved by this order this appeal has been filed before us.

3. We heard the learned Counsel for both the parties. There is no disputing the fact that the said baxi-cab was authorised to carry 12+1 passenger whereas at the time of meeting the accident, it was carrying 26 passengers, the driver was holding a driving licence to drive the LMV. We heard the learned Counsel for the parties on these points. Admitted position is that the said vehicle was carrying more than the authorised passengers (more load than the permissible load). The State Commission has relied upon the judgment of the Supreme Court in the case of Jitendra Kumar v. Oriental Insurance Co. Ltd., 2003 4 CLD 685 (SC). As we see this judgment relates to the third party claims whereas this is not the case before us and also the fact that the accident was not caused by carrying excess passengers. We are afraid that this judgment will have no bearing in the present case as this is not a third party claim and secondly, there is no material brought on record one way or the other as to who was responsible for the accident? Be that as it may, these are Guidelines issued by the GIC for settlement of such claims on non-standard basis.

4. The findings returned by the State Commission on the point of the vehicle carrying more than the licensed capacity cannot be made a ground for relying on the judgment in the case of B.V. Nagaraj v. Oriental Insurance Co., II (1996) CPJ 28 (SC)=AIR 1996 2054. This judgment has again not dealt with the settlement of claim on non-standard basis. There is no dispute that the vehicle was registered on 7.4.95 and it met with an accident on 17.4.96, the vehicle was already over one-year old. The vehicle had been purchased admittedly for Rs. 5,40,000/-. Hence as per depreciation of 20% applied by the Income-tax Department, the value of the vehicle would be 4,32,000/-. Not having proper valid licence to drive a Maxi-cab as also carrying excess passengers than the licensed capacity are violation of the terms and conditions of the Policy. It is for covering these contingencies that GIC has issued the Guidelines for the Insurance Company for settling the claim on ‘non-standard basis’, which is as follows:

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:

Sr. No.

Description

Percentage of settlement

(i)

Under declaration of licensed carrying capacity

Deduct 3 years’ difference in premium from the amount of claim or deduct 25% of claim amount, whichever is higher

(ii)

Overloading of vehicles beyond licensed carrying capacity

Pay claims not exceeding 75% of admissible claim.

(iii)

Any other breach of warranty/condition of policy including limitation as to use.

Pay upto 75% of admissible claim

5. Keeping in view the Guidelines, the repudiation of the claim by the Insurance Company cannot be sustained but we also cannot sustain the order of the State Commission insofar as the quantum of relief is concerned. Keeping in view the Guidelines and the facts and circumstances of this case, the appellant is directed to settle the claim on ‘Non-standard basis’ pay Rs. 3,24,000 (Rs. 4,32,000 x 75%) along with interest @ 9% p.a. and cost a