IMPORTANT POINT
Allowing a few more persons to travel should not disentitle complainant to receive full compensation under insurance policy.

Vinay Kumar, Member—The facts on record are that the Complainant had insured his TATA-407 vehicle with the respondent in January 2001 for a sum of Rs.2 lakhs. This vehicle met with an accident in May 2001. The estimates for repairs showed a requirement of Rs.1,35,370/- which was assessed by the surveyor appointed by the insurance company. The surveyor recommended Rs.68,610/- as the net payable amount. But, the National Insurance Co. sent him an offer for only Rs.47,600/-, in settlement of the claim on ‘non-standard basis’, on the ground that at the time of the accident of this vehicle, there were extra passengers sitting in it. When this offer was not accepted by the complainant, the Insurance Co closed it as a ‘no claim’ case.

2. The District Forum, Himmat Nagar Sabarkantha, considered the claim of Rs. 1,23,000/- made by the Complainant and directed the Insurance Co. to pay the total repair bill of Rs. 98,860/-, with 6% interest and compensation of Rs. 2,000/-. The District Forum held that medical reports of only 4 persons were presented and that the Insurance Co was not able to prove that the vehicle was illegally carrying more passengers, at the time of the accident.

3. In the appeal before the Gujarat State Commission, it was argued that there were 9 persons in the vehicle at the time of the accident. The State Commission held that the number of persons was not relevant to the cause of accident. The State Commission therefore concluded that there was no point involved for decision in the appeal. It dismissed the appeal, along with the application for condonation of delay and upheld the order of the District Forum. The Revision petition before us is against this order of the State Commission.

4. In the RP, the main issue raised pertains to the allegation that 9 persons traveling in the vehicle was a matter in clear breach of the policy condition. As per the policy, besides the driver, not more than 6 persons could travel in it. Counsel for the RP argued that 2 persons had died and 4 were injured in this accident. Therefore, it needs to be viewed as a fundamental breach.

5. It is not the case of the Revision Petitioner that the vehicle at the time of accident was being driven by a person not authorized to drive light goods vehicle. The question therefore, gets limited to the number of persons traveling in it. We have already referred to the observation of the District Forum in this regard.

6. Counsel for the revision petitioner has cited the ruling of the Hon’ble Supreme Court of India in . This was a case National Insurance Co. Limited v. Kaushalaya Deviand Ors.1 in which the son of the complainant had died in a truck accident. The objections taken were that the Driver did not possess a valid licence and that the deceased was traveling as an unauthorized person on the truck, which was a goods carriage. The Tribunal had awarded a compensation of Rs. 1,18,000/-. In the appeal, the High Court held that the driver did not have a valid driving licence and therefore, the insurance company was wrongly held liable to pay compensation. The High Court also accepted the plea of the Insurance Company that the deceased was an unauthorized person. The Supreme Court upheld the judgment of the High Court and observed that in view of its findings, the owner alone should be liable to pay compensation to the complainant for the death of her son caused by rash and negligent driving on the part of the driver of the truck.

7. It is clear from the above that the matter was considered by Hon’ble Supreme Court of India in the context of liability of the insurer towards the deceased who was an unauthorized traveler in the truck at the time of the accident. The issue in the case before us is very different and relates to the rights, not of a third party but, of the insured himself, under the policy. The issue is whether the insurance company can rely upon presence of certain others in the vehicle at the time of the accident to deny