Insurance claims can be settled on a non-standard basis for non-fundamental breaches, with compensation adjusted according to the degree of overloading.

ORDER :

1. This Revision Petition has been filed against the impugned Order dated 09.11.2016 passed by the Ld. State Consumer Disputes Redressal Commission, Punjab in Appeal No. 1430/2013 vide which, the Appeal filed by the Complainant was allowed and the Order of the Ld. District Forum dismissing the complaint was set-aside.

2. The factual background, in brief, is that the Complainant who is engaged in the trade of both edible and non-edible items as a dealer and commission agent, procured an Open Marine Policy from the Petitioner, with policy number OG-12-1203-1005-0000001, covering the period from 01.04.2011 to 31.03.2012. Despite not receiving a copy of the policy, the Complainant operated under the belief that its terms and conditions mirrored those of policies obtained for two other affiliated firms from the Petitioner. On 07.06.2011, the Complainant contracted M/s Sahni Tanker Service to transport 30.850 tons of rice bran oil to a consignee in Kanpur Dehat. The value of the oil amounted to Rs. 16,25,795/-. The oil was being transported in a tanker bearing registration number PB-11-AF-9577 when it was involved in an accident near Agra on 12.06.2011, resulting in the loss of the entire consignment. A First Information Report (FIR) was subsequently filed under Sections 279, 304-A, 337, and 338 of the Indian Penal Code at PS Kosikalan, Mathura. Upon notifying the Petitioner's office in Agra, a surveyor was appointed to assess the damages. Following the surveyor's inspection and submission of a survey report, the Petitioner requested additional documentation for the claims process, which the Complainant promptly provided. However, the Petitioner rejected the claim in a letter dated 23.08.2011. Subsequently, the Complainant issued a Legal Notice dated 20.12.2011, demanding payment of the claim amount within 15 days. Despite this, no response was received from the Petitioner. In response to the wrongful repudiation of the claim, the Complainant filed its complaint before the Ld. District Forum, Ludhiana.

3. The District Forum vide its Order dated 23.10.2013 dismissed the complaint. The Complainant then filed Appeal before the Ld. State Commission, which allowed the same vide the impugned Order dated 09.11.2016, and directed the Petitioner to pay to the Complainant 75% of the insured amount along with interest @8% p.a. from the date of repudiation till the date of realization. The relevant extracts of the impugned Order are set out as below:

“6. The OPs repudiated the claim of the complainant on the sole ground of overloading the tanker than its capacity. The OP took it as major breach of terms and conditions of the policy. The law has been settled by Supreme Court in National Insurance Co. Ltd. vs. Nitin Khandelwal, 2008 (III) CPC 559, to the effect that where the breach of the terms and conditions of policy is not fundamental, the claim should be settled on non standard basis. Even in Amalendu Sahu vs. Oriental Insurance Co. Ltd. 2010 (III) CLT 01, the Apex Court has held that relied upon the guidelines for settling such claims on non standard basis. In case of overloading of vehicle beyond licenced carrying capacity, pay claims not exceeding 75% is admissible claim. Supreme Court has held that overloading beyond licenced capacity to be a case of non standard basis for settlement and pay claim should not exceed 75% of the insured amount. We are further fortified by law laid down by National Commission in Oriental Insurance Co. Ltd. vs. B. Ramareddy, 2006 (II) CPC 274 to the effect that in case of carrying passengers beyond seating capacity, the claim should be settled on non standard basis with interest. The breach of policy is not fundamental in this case and claim is liable to be settled on non standard basis not exceeding 75% of the assured amount.

7. With regard to the next objection that complaint is not maintainable because the business of complainant was commercial, it is settled principle of law that insurance is taken for