Insurers must prove policy breaches to deny liability; mere overloading claims without evidence of causation are insufficient to repudiate insurance claims.

JUDGMENT

1. The facts of the case as per the District Commission record are as under:

“1. The complainant has filed the present complaint against OPs under Section 12 of the Consumer Protection Act., 1986 thereby alleging that OP-2 is an employee of the complainant and is working as Assistant Manager and is necessary and proper party and the complainant purchased a Vehicle Maruti Vagon R Lxi bearing Regn. No. DL-2C- Ak-0766 on 22.11.2008 for a total sum of Rs.3,26,963.62 and under Employee Welfare Scheme, the vehicle was provided to OP-2 for his personal as well as official purposes under an agreement of hypothecation dated 02.10.2008 and under Insurance Policy, the vehicle was not only insured for its own value but also for 3rd party liability which provides for and covers liability to 3rd party which means indemnity to the insured in the event of accident caused by or arising out of the use of the motor vehicle against all sums including claimants costs and expenses in respect of death of or bodily injury to any person including occupants carried in the motor vehicle provided such occupants and the liability of OP in case of the accident is unlimited as per Motor Vehicle Act, 1988. On 19.11.2009, the said insurance policy was renewed and extended for another period of one year i.e. from 26.11.2009 to 25.11.2010 upon payment of premium of Rs. 7,242/- including service tax and policy no: 360800/31/09/6100004241 was issued and the value of the vehicle was taken as Rs.2,82,000/- after depreciation and subsequently, when the family members of OP-2 were travelling from Haldwani to Bahesi, the said vehicle met with a fatal accident with a dumper on 10.01.2020 at 6:30 p.m. on Haldwani-Bareilly Road, Near Lalkuan, District- Nainital and four adult and 2 minor family members of OP- 2 died in the said accident and 1 adult and 3 minor children of family members of OP-2 suffered serious injuries. The complainant further alleged that a FIR bearing no. 4/10 u/s 279/337/338/304A/427 of IPC was registered against the driver as well as owner of the Dumper bearing no.UA-04- B-3311 which caused the accident in P.S. Lalkuan for rash and negligent driving and the vehicle is completely destroyed in the said accident and is beyond repair or use. Thereafter, vide letter/claim intimation dated 31.03.2020 along with all necessary documents, the complainant intimated OP-1 regarding accident of the insured vehicle and requested OP-1 to release the insurance claim as the vehicle was completely destroyed in the accident, however, after approx. two and half months, OP-1 illegally and arbitrarily vide letter dated 15.07.2010 repudiated the claim of the complainant on the ground of considerable overloading but there is no such stipulation in the policy document bearing no. 360800/31/09/6100004241 and hence, the ground of rejection is an afterthought to deny the complainant its insurance claim which is not only illegal but also contrary to the insurance policy and the reason given by OP-1 for repudiation i.e. "considerably overburdening" of the insured vehicle is not only contrary to the factual position but also arbitrary as the reason for fatal accident was not due to the overloading but as a result of sudden, rash or negligent driving of the Dumper no.UA-04-B-3311 which was plying on the road in front of the insured vehicle at the relevant time and after investigation, police has also given the report that the accident was due to the rash and negligent driving of the Dumper and not by overburdening of insured vehicle. The complainant further alleged that the insured vehicle has a sitting capacity of 5 adults along with 5 minor children and vide letter dated 30.08.2010, the claimant replied to the repudiation letter dated 15.07.2010 and once again requested OP-1 to release the claim of the complainant and also that the repudiation of the claim by OP-1 is illegal and is contrary to the terms & conditions of the insurance policy and in response of the said let