Dr. P.D. Shenoy, Member—In this case, the complainant had taken a loan from the Karnataka Bank, Chitradurga and insured his Tata Indica Car (Taxi) with the Insurance Company for Rs. 3,35,000. After the accident, the vehicle was taken to the Maruti Auto Garage and the amount of loss was assessed to the tune of Rs. 3,51,293 with Rs. 23,550 as labour charges. The complainant alleged that the Insurance Company agreed to pay Rs. 2,24,000 and asked the complainant to hand over the vehicle to their custody along with the RC book. It is contended by the Insurance Company that the car had got a seating capacity of 5 passengers but there were seven persons at the time of the accident. Hence, the complainant was not entitled to any claim.

2. Hence the complainant filed a complaint before the District Forum seeking Rs. 3,15,000 from the Insurance Company after deducting 5% depreciation along with Rs. 50,000 towards compensation, Rs.40,000 towards interest, Rs. 10,000 towards the garage charges and Rs. 50,000 towards mental agony. According to the report given by the surveyor, the repair of the vehicle was done at Rs. 3,75,000 and the total loss was assessed at Rs. 3,42,295. The complainant who had insured the vehicle at Rs. 3,35,000 had claimed Rs. 3,18,550 after calculating 5% depreciation. This was held to be valid by the District Forum and accordingly, directed the Insurance Company to pay Rs. 3,18,750 within one month from the date of the order failing which the opposite party shall pay interest @ 18% per annum until the money is totally paid to the complainant. In addition, the District forum also ordered Rs. 10,000 for the loss incurred in business and Rs. 10,000 towards mental agony and Rs. 20,000 towards cost.

3. Aggrieved by the order of the District Forum, the Insurance Company filed an appeal before the State Commission, which reduced the compensation to Rs.2,75,000 with 12% interest and also directed to return the salvage to the Insurance Company. The State Commission observed that “there were three children as per the post-mortem report and these children were in the age group of 2, 3 and 7 years. If these three children are excluded, as they do not require a separate seat in the vehicle, the remaining persons are only 1+4. Taking into consideration that all these persons who were travelling are all dead awarding a sum of Rs. 2,75,000 as compensation which appears to be little more than the compensation offered by the Insurance Company on non-standard basis would meet the ends of justice.”

4. Dissatisfied by the order of the State Commission, the complainant has filed this revision petition before us seeking restoration of the order of the District Forum.

5. We have heard the learned counsel for the petitioner as well as the respondent. Three children were travelling as per the post-mortem report. If from the number of passengers are excluded children, there is no overloading. Hence, we do not see any merit in the analysis of the State Commission that the Insurance Company can award compensation on non-standard basis. Assuming for a moment, even if there is an extra passenger or two, it cannot be construed as a violation of the terms of policy. Hence, we draw inspiration from the following judgments. The Apex Court in B.V. Nagaraju v. Oriental Insurance Co. Ltd.1 has held as follows:

“It is plain from the terms of the Insurance Policy that the Insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of any incident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was carrying. Here, it is nobody’s case that the driver of the insured vehicle was responsible for the accident. In fact, it was not disputed that the oncoming vehicle had collided head on against the insured vehicle, which