The central legal point established in the judgment is that a claim can be allowed on a non-standard basis if there is no fundamental breach of the policy terms, and the breach is not significant enough to justify the repudiation of the claim.

Headnote:
Insurance - Vehicle Insurance - Breach of Policy Terms - Claim allowed on non-standard basis
Fact of the Case:

The complainant's goods vehicle was insured by the petitioner. The vehicle met with an accident and was damaged. The petitioner repudiated the claim on the ground that the vehicle was carrying six unauthorized passengers, breaching the policy terms.
Finding of the Court:

The State Commission allowed the claim on a non-standard basis, stating that there was no fundamental breach of the policy terms, but only some breach, and relied on previous judgments where claims were allowed under similar circumstances.
Issues: The main issue was whether the breach of policy terms regarding the number of passengers in the vehicle justified the repudiation of the claim.
Ratio Decidendi: The court held that the complainant was entitled to claim on a non-standard basis, as there was no fundamental breach of the policy terms, and allowed the claim with 75% of the estimated cost.
Final Decision: The revision petition filed by the petitioner was dismissed, and the court upheld the State Commission's decision to allow the claim on a non-standard basis.

ORDER

Mr. K.S. Chaudhari, (P.M) - This revision petition has been filed by the petitioner against the order dated 29.06.2009 passed by the H.P. State Consumer Disputes Redressal Commission, Shimla (in short, 'the State Commission') in Appeal No. 137 of 2007, Suresh Kumar v. National Insurance Co. Ltd. by which, while allowing appeal, order of District forum dismissing complaint was set aside and complaint was partly allowed.

2. Brief facts of the case are that Complainant/Respondent was registered owner of Mahindra pick up jeep No. HP-31-2782 and he got it insured from OP/petitioner for a sum of Rs. 2,10,000/- for a period of one year from 20.3.2005 to 19.3.2006. On 27.8.2006, vehicle met with an accident and vehicle was damaged and FIR was lodged. Complainant reported incident to OP and OP asked complainant to get it repaired. Complainant got it repaired and paid Rs. 1,00,000/- for repairs and claim was submitted to OP. OP vide letter dated 24.1.2006 repudiated claim on the ground that at the time of accident vehicle was carrying six unauthorized persons. Alleging deficiency on the part of OP, complainant filed complaint before District Forum. OP resisted complaint, admitted issuance of insurance policy, but submitted that surveyor found that at the time of accident vehicle was carrying six unauthorized passengers whereas vehicle was registered as goods carrier, so, claim was rightly repudiated and prayed for dismissal of complaint. Learned District Forum after hearing both the parties dismissed complaint. Appeal filed by the complainant was allowed by learned State Commission vide impugned order and OP was directed to pay Rs. 59,722/- with 9% p.a. interest and further directed to pay Rs. 5,000/- as cost of litigation against which, this revision petition has been filed.

3. None appeared for the respondent even after service and he was proceeded ex-parte.

4. Heard learned Counsel for the petitioner and perused record.

5. Learned Counsel for the petitioner submitted that in spite of proof of breach of terms and conditions of policy, learned State Commission committed error in allowing complaint; hence, revision petition be allowed and impugned order be set aside.

6. It is not disputed that complainant's goods vehicle was insured by OP and during subsistence of policy, vehicle met with an accident and was damaged.

7. Learned State Commission observed that vehicle was having sitting capacity of 1 + 2 whereas, there were six persons travelling in the vehicle, but perusal of insurance policy reveals that it covered owner-cum-driver and three employees meaning thereby, four persons were entitled to travel in the vehicle, but seven persons were travelling in the vehicle against capacity of four persons. Learned State Commission after elaborate discussion, observed that there was unrebutted evidence of three persons, who were travelling in the vehicle along with their goods. In such circumstances, those three persons cannot be treated as unauthorized passengers or passengers being carried for hire. It was further observed that learned District Forum wrongly assumed that all the six persons were sitting in driver's cabin meaning thereby, there was no evidence on record to prove that all the six persons were sitting in driver's cabin and in such circumstances, accident cannot be said to be due to overloading of passengers in the cabin. Learned State Commission in paragraph 10 of the judgment also observed that accident was due to mechanical failure and not on account of overloading.

8. It is true that there was breach of terms and conditions of policy, as vehicle was carrying more persons than permissible. Learned Counsel for the petitioner submitted that on account of breach of terms and conditions of policy, District Forum rightly dismissed complaint. She also placed reliance on the judgment of this Commission in R.P. No. 1823 of 2012 - Kalyan Singh Chauhan v. National Insurance Co. in which revision petition filed by the complainant

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The central legal point established in the judgment is that a claim can be allowed on a non-standard basis if there is no fundamental breach of the policy terms, and the breach is not significant enough to justify the repudiation of the claim.

Cases Referred (1)

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