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2010 Supreme(J&K) 110
IN THE HIGH COURT OF JAMMU AND KASHMIR AT JAMMU
Mansoor Ahmad Mir, J.
Oriental Insurance Co. Ltd. - Appellant
Versus
Rajinder Kumar & Ors. - Respondent
OWP No. 696/2007 & CMP 1019/2007
Decided On : 17 March, 2010
Advocate For Appellant: R.K. Jain
Advocate For Respondent: G.S. Wazir
The central legal point established in the judgment is that an insurer cannot avoid liability by alleging breach of insurance policy terms without proving that the breach directly caused the accident.
Headnote:
Insurance - Vehicle Insurance - Liability of Insurer - Breach of Insurance Policy Terms - Negligent Driving - Overloading - Liability of Insurer
Fact of the Case:
The respondent filed a complaint against the insurer for not settling the claim after the insured vehicle was totally damaged in an accident. The complaint was allowed by the Divisional Consumer Forum and the State Consumer Disputes Redressal Commission, directing the insurer to pay the claim amount with interest.
Finding of the Court:
The court found that the accident was the outcome of rash and negligent driving, and the reports of the Surveyors and the police investigation established this. The court held that the insurer cannot avoid liability by alleging breach of terms and conditions of the insurance policy without proving that the breach caused the accident.
Issues: The issues revolved around the liability of the insurer in the case of a vehicle accident, breach of insurance policy terms, and the cause of the accident.
Ratio Decidendi: The court emphasized that the insurer must prove that the alleged breach of the insurance policy terms directly caused the accident to avoid liability. It also highlighted the importance of evidence in establishing the cause of the accident and the insurer's liability.
Final Decision: The court dismissed the writ petition, upholding the orders of the lower forums and affirming the liability of the insurer to pay the claim amount with interest.
2. Respondent no.1 filed a complaint before the Divisional Consumer Forum, Jammu against the writ petitioner-insurer on the grounds that the vehicle bearing registration No.JK0L-6447 Video Coach was insured with writ petitioner-insurer vide Insurance Policy No.262100131/2001/1699/301 which was valid from 26.10.2000 to 25.10.2001. The said vehicle met with an accident near Patta Todian Bimber Gali (Poonch) on 19.05.2001. The vehicle was totally damaged and the claim was made against the writ petitioner-insurer who deputed a Surveyor on 25.05.2001. The said Surveyor visited the spot and assessed the loss of the vehicle. The Surveyor also submitted his report for the assessed loss of the vehicle but the claim was not satisfied. After sometime writ petitioner-insurer deputed another Surveyor, namely, L.Mehta and Company who also assessed the loss and submitted the report and even despite that writ petitioner-insurer failed to settle the claim of the respondent no.1. which constrained the respondent no.1 to file complaint before the Divisional Consumer Forum, Jammu.
3. The writ petitioner-insurer resisted the complaint on the grounds taken in the objections. After hearing learned counsel for the parties the complaint came to be allowed vide order dated 24.10.2005 and writ petitioner-insurer came to be directed to pay Rs.4,98,500/- along with interest @ 6% p.a. w.e.f. 13.07 2001 till its realisation.
4. Feeling aggrieved of the aforesaid order writ petitioner-insurer preferred an appeal before the J&K State Consumer Disputes Redressal Commission, Jammu-respondent no.2, which came to be dismissed vide order dated 24.04.2007 with costs quantified at Rs.4000/-.
5. The writ petitioner-insurer has questioned both these orders only on a short point that accident was the outcome of breach of terms and conditions of the insurance policy, driver was driving the vehicle in violation of the terms and conditions of the policy and route permit. Thus, the writ petitioner-insurer cannot be saddled with liability. The writ petitioner-insurer has not led any evidence before the Divisional Consumer Forum, Jammu to the extent that overloading of the passengers was the cause of accident. In order to avoid the liability, the writ petitioner-insurer has to plead and prove that overloading was the cause of accident otherwise it has to satisfy the award. Both the forums below have specifically held that the reports of the Surveyors and the final investigation report-final charge sheet of the police framed in terms of Section 173 of the Criminal Procedure Code categorically establish that accident was the outcome of rash and negligent driving. It is nowhere pleaded and proved as discussed hereinabove that overloading was the cause of accident. Both the forums have rightly saddled the writ petitioner-insurer for liability.
6. Mr. Jain in support of his case cited two judgments of the Apex Court titled B.V. Nagaraju v. M/s Oriental Insurance Co.Ltd., Divisional Office, Hassan, reported in AIR 1996 SC 2054 and National Insurance Co.Ltd. v. Anjana Shyam and others reported in AIR 2007 SC 2870, and argued that the writ petitioner-insurer is not liable to satisfy the award. Both these judgments are not supporting his case rather these support the impugned judgments.
7. In case AIR 1996 SC 2054 (supra), their Lordships held as under :-
"Merely by lifting a person or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so f
