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NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION
J.M. Malik, P.M and Dr. S.M. Kantikar, Member
ASHWINI UTTAM SHINDE AND OTHERS - Appellants
Versus
NEW INDIA ASSURANCE CO. LTD. - Respondent
Revision Petition No. 1804 of 2015 (First Appeal No. F.A. 11/363 with I.A. 4612 of 2015).
Decided on : 07-10-2015
Mr. Abdul Rahiman Tamboli and Mr. Preetam Shah, Advocates, for the Appellant
The court emphasized the strict construction of insurance policy terms and the discretion of the insurance company in settling claims.
Headnote:
Insurance - Goods Vehicle - Good Carrying Commercial Package Insurance Company - B.V. Nagaraju v. Oriental Insurance Co. Ltd., II (1996) CPJ 18 (SC), Amalendu Sahoo v. Oriental Insurance Co. Ltd., 2010 ACJ 1250, General Assurance Society Ltd. v. Chandmull Jain and Anr, 1966 ACJ 267 - The court discussed the interpretation of insurance policy terms, strict construction of exclusion clauses, and the discretion of the insurance company in settling claims.
Fact of the Case:
The insured purchased a Tanker for transporting milk and obtained an insurance policy. The Tanker met with an accident, resulting in the death of the insured. The insurance claim was repudiated due to the Tanker carrying passengers illegally.
Finding of the Court:
The State Commission dismissed the complaint, emphasizing the strict construction of insurance policy terms and the discretion of the insurance company in settling claims.
Issues: Interpretation of insurance policy terms, strict construction of exclusion clauses, and the discretion of the insurance company in settling claims.
Ratio Decidendi: The court held that the exclusion clause of the insurance policy must be read down to serve the main purpose of the policy, and the insurance company has the discretion to consider claims on a non-standard basis.
Final Decision: The court modified the order passed by the District Forum, directing the OP to pay 75% of the assessed amount to the complainant.
ORDER
Mr. Justice J.M. Malik, (P.M) - We have heard the Counsel for the petitioner. None has appeared on behalf of the respondent, despite service. Sh. Uttam Shankar Shinde, the insured (deceased), purchased a Tanker for transporting milk. He obtained insurance policy from the New India Assurance Co. Ltd., the OP. During the subsistence.of the policy, on 26.6.2006, the complainant was going to Mumbai, in the said Tanker, along with the milk. The said Tanker met with an accident on Pune-Mumbai Express Highway. Unfortunately, the complainant passed away on the spot. The Tanker was totally damaged.
2. The case of the OP is that the Tanker was a Goods Vehicle and it was insured under the Good Carrying Commercial Package Insurance Company. During the investigation by the Surveyor and the Officer of the Insurance Company, it transpired that he was carrying four passengers, illegally. As per Registration Certificate, only Tanker, Driver was allowed to travel through Tanker. Consequently, the claim of the complainant was repudiated, though the Surveyor had given assessment on total loss basis in the sum of Rs. 7,73,650.
3. The District Forum allowed the complaint and directed the OP to pay Rs. 7,73,650, with interest @ 9% p. a., from 21.10.2008, till realisation of the amount. The District Forum awarded Rs. 2,000 towards costs of the complaint.
4. The State Commission dismissed the complaint, while observing as under:
"14. Forum below relied upon the decision of Apex Court in the matter of B.V. Nagaraju v. Oriental Insurance Co. Ltd., II (1996) CPJ 18 (SC), Supreme Court, in which it is interpreted that policy of the insurance need to be construed strictly or be read to advance the main purpose of the contract The reliance is further placed at the time of arguments, on the recent judgment of Apex Court in the matter of Amalendu Sahoo v. Oriental Insurance Co. Ltd., 2010 ACJ 1250, wherein the Division Bench of Apex Court upheld the ratio applied by Hon'ble National Commission to grant compensation on non-standard basis even if it is case of breach of terms of insurance policy. However, we find decision on which respondent/org. complainant relies on the judgment per in curriam since it ignored the decision of Hon'ble five Judges Bench of Apex Court in the matter of the General Assurance Society Ltd. v. Chandmull Jain and Anr, 1966 ACJ 267. The ratio of said case is that insurance being the contract and when the terms of the insurance policy are not in question by the parties and if they are not ambiguous, those terms need to be given effect to and it is not for the Court or quasi-judicial authority dealing to the question for interpretation, otherwise, or those clauses are not subject to inquiry by such authorities. In the instant case, the terms of the insurance policy are clean and no ambiguity is left. The exclusion clause is part and parcel of the insurance policy. Therefore, when it is established that there is a breach of terms of the insurance policy, repudiation of the insurance claim cannot be faulted with. Furthermore, even as observed by the Hon'ble National Commission in the matter of National Insurance Co. Ltd. v. Nitin Khandelwal 2008 ACJ 2035 (NC) that the appellant Insurance Company is liable to indemnify the owner of the vehicle when the insured has obtained comprehensive policy for the loss caused to the insured. The respondent submitted that even assuming that there was a breach of condition of the insurance policy, the appellant Insurance Company ought to have settled the claim on nonstandard basis. It is the discretion of the Insurance Company to consider the case in the light of the policy. When the question of discretion comes, which is used in a just and proper manner, one cannot presume deficiency in service on the part of the Insurance Company, within the meaning of Consumer Protection Act, 1986. Thus, we find that Forum below erred in settling the dispute. We cannot support the impugned order. Holding according
