Insurance claims cannot be repudiated for minor breaches not causally linked to the loss; non-standard settlements are valid.

ORDER

1.The instant Revision Petition has been filed under Section 21 (b) of the Consumer Protection Act , 1986 (for short “the Act”) assailing Order dated 25.04.2018 passed by the learned State Consumer Disputes Redressal Commission, Punjab, Chandigarh (hereinafter referred to as the “State Commission”) in First Appeal No. 182/2018, whereby the Appeal filed by the Insurance Company/OP was dismissed.

There is a delay of 22 days in filing the present Revision Petition. In the interest of justice, the short delay in filing the petition is condoned.

2. In brief, during the subsistence of valid Private Car Package Policy, the car owned by the complainant met with an accident on 26.03.2017 which would be treated as a total loss. An FIR was registered at PS Sadar, Karnal in this regard. The Insurance Company repudiated the claim vide letter dated 08.06.2017 on the ground that though the vehicle was insured as a private car, the same was being plied as a taxi/hired vehicle with PRTC, thereby violating the terms of the policy. Learned District Forum allowed the complaint on ‘non-standard basis’, relying upon ratio laid down inNational Insurance Co. Ltd. v. Nitin CBA Khandelwal, (2008) 11 SCC 259 and directed the Insurance Company to pay 75% of the assessed loss of Rs.2,27,992/- with interest @ 9% p.a. from 07.09.2017 till realization, along with compensation and litigation costs. An appeal preferred by the Insurance Company/opposite party before the learned State Commission, Punjab Chandigarh was further dismissed holding that in case of breach on account of use of the vehicle for ‘hire and reward’, the claim cannot be repudiatedi C n B t A oto and is to be settled on non-standard basis, upto 75% of the admissible claim. The Order passed by the learned District Forum was accordingly upheld by the learned State Commission. Aggrieved against the Order passed by the learned State Commission, present Revision Petition has been preferred by the Insurance Company/opposite party.

3. Learned counsel for the revisionist/lnsurance Company contends that the use of vehicle for commercial purpose while paying the premium amount for a private vehicle constitutes a gross and fundamental violation of policy condition, and accordingly the claim could not have been allowed on non-standard basis. Reference is further made to Export Credit Guarantee Corporation of India Ltd. v. Garg Sons International , (2014) 1 SCC 686 to contend that insurance is a commercial contract and the terms and conditions are required to be strictly read. Relying uponSanjay Kumar v. Reliance General Insurance Co. Ltd., RP No. 2158-2159 of 2011, learned Counsel for Insurance Company also emphasized that settlement on non-standard basis upto 75% of the claim amount is applicable to breaches like carrying beyond capacity, overloading etc. The settlement of claim as directed by the learned District Forum and learned State Commission, placing reliance onAmalendu Sahoo v. Oriental Insurance Co. Ltd. , ' CBA (2010) 4 SCC 536, is stated to be erroneous. The claim inAmelendu Sahoo v. Oriental Insurance Co. Ltd. (supra) is stated to have been JIHGFEDCBA allowed keeping in consideration that the insurer had framed guidelines permitting settlement of claims on non-standard basis. Reference is also made toNational Insurance Co. Ltd. v.Meena Aggarwal, (2009) 2 SCC 523 and Rajesh Kumar v. National Insurance Co. Ltd. , RP No. 3045 of 2015.

4.On the other hand, learned counsel for the complainant contends that claim could not be repudiated in toto by the Insurance Company merely because the vehicle was allegedly used for hire and rewar