IMPORTANT POINT
Insurance claim is not payable for breach of terms and conditions of policy.

Dr. B.C. Gupta, Presiding Member—Baldev Raj, deceased, was the owner of a Trax vehicle, bearing registration No.HP-02A-3050, which was insured with the petitioner/opposite party (OP) Insurance Company for an Insured Declared Value (IDV) of Rs.3.20 lakh for the period 23.06.2004 to 22.06.2005. In addition, the policy provided accident cover of Rs.2 lakh for the owner – driver of the vehicle. The said vehicle met with an accident on 05.07.2004 at Village Tapri, Tehsil Kalpa, District Kinnaur, Himachal Pradesh while being driven by another person Prabhu Lal. The vehicle is stated to have suffered complete loss during the accident and the owner Baldev Raj who was sitting in the vehicle at that time, died as a result of the accident. A claim was lodged with the petitioner insurance company by complainants/respondent No.1 to 4, who are stated to be successors.-in-interest of the said deceased Baldev Raj. The complainants/respondents No.1 to 3 are his wife and two minor daughters. The petitioner Insurance Company, however, repudiated the claim on the ground that at the time of the accident, the vehicle was being driven by Prabhu Lal, who did not have a valid and effective license to drive this kind of vehicle. He had license to drive a Light Motor Vehicle (LMV) only and hence, the claim was not payable in accordance with the terms and conditions of the insurance policy, in question. It was also stated by the petitioner that the personal accident cover is available only, when the insured person is driving the vehicle and not merely sitting in vehicle.

2. The respondents/complainants filed the consumer complaint in question before the concerned District Forum, seeking directions to the petitioner to pay the claim. The District Forum vide their order dated 17.11.2007, allowed the complaint and directed payment of a sum of Rs.3,03,000/- to complainants No.1 – 3 / respondents No.1 – 3 on total loss basis alongwith interest and litigation cost. The District Forum also directed that payment of Rs.2 lakh should be made to complainants 1 to 4 with interest @9% p.a. with effect from 05.10.2004, i.e., after the expiry of 3 months of the date of the accident. Being aggrieved against the order of the District Forum, the petitioner insurance company challenged the same by way of appeal before the Himachal Pradesh State Consumer Disputes Redressal Commission (hereinafter referred to as ‘State Commission’). The State Commission vide impugned order dated 10.05.2010, partly allowed the appeal and reduced the compensation on account of own damage from Rs.3,03,000/- to Rs.1,75,500/-. The State Commission observed that the surveyor had recommended to settle the claim for a sum of Rs.2,34,000/-, but since the driver of the vehicle did not have a valid license for commercial vehicle, the complainants were liable to be compensated on ‘non-standard’ basis, which was worked out to Rs.1,75,500/-, as 75% of the amount of Rs.2,34,000/-. The State Commission also allowed claim on account of “Personal accident benefit”. Being aggrieved against the impugned order of the State Commission, the Insurance Company has filed the present revision petition.

3. The main ground taken by the petitioner Insurance Company in the petition says that the vehicle in question was a commercial vehicle, whereas the driver Prabhu Lal did not have a valid and effective license to drive such kind of vehicle. There had, therefore, been a violation of the terms and conditions of the insurance policy and hence, the petitioner had no liability to pay any part of the claim to the complainants. At the time of arguments also, the learned counsel for the petitioner has drawn attention to the orders passed by the Hon’ble Supreme Court of India in New India Assurance Company Limited vs Prabhu Lal, (2008) 1 SCC 696: 2008 (4) CPR 144 (SC), and National Insurance Company Ltd. vs. Meena Aggar