MALKHAN SINGH Vs. NEW INDIA ASSURANCE CO LTD

JUDGEMENT

(1.) Malkhan Singh, complainant No.1, purchased truck bearing registration number DDN 3447, 1989 model with the financial assistance of complainant No.2. The truck was insured with New India Assurance Company Limited for the period 16.2.90 to 15.2.91 for a sum of Rs.2,20,000/- with inter-purchase endorsement in favour of complainant No.2. The truck met with an accident between Mainpuri and Dannahar on 25.12.90. It was badly damaged. The Insurance Company appointed Mr. A. K. Shankdhar, Surveyor who carried out spot survey on 28.12.90 and submitted his report-dated 12.1.91. In addition to complainant No.1, complainant No.2 also continued to follow up with the Insurance Company and the Insurance Company informed complainant No.2 that assessment was regarding total loss being accepted and the final approval was being awaited. There was a lot of correspondence between the Regional Office, Kanpur and its counter-part in New Delhi. One of the facts which came to light was that four persons besides the driver were travelling in the truck at the time of the accident. Out of them three persons had died in the accident. According to the complainant, the 4th person, who survived was the conductor of the truck and the three persons namely Anand Swaroop Chaturvedi, Ghanshyam and Rajinder, who had died were persons who had to carry a consignment of garlic in the said truck. Further, according to the complainant, me registration certificate permitted carrying of six persons besides the driver. The Insurance Company entertained serious doubts whether the claim could be accepted and settled in view of the contravention of the condition of the policy prescribing carrying of passengers for hire or reward. The complainant was paying instalments @ 7,300/- per month to complainant No.2 and was having a net income of Rs.7,500/- per month by the use of the truck. The amount due to the financier had amounted to Rs.3,75,688/- as on 16.9.94. The complainant claimed the full amount insured under the policy besides Rs.5,00,000/- as compensation along with interest and costs.

(2.) The complaint was contested. It was stated that four unauthorised persons were travelling in the truck at the time of the accident and out of them three had died, as a result of the accident. The opposite party had received legal opinion that the claim can be approved on substandard basis and not on total loss basis. With regard to the delay, the stand of the opposite party is that the complainant failed to furnish his changed address with the result that letters addressed to him to secure his consent to settle the claim on sub-standard basis could not be processed further. Further plea raised by the opposite party is that the information furnished by the complainant in the claim form was mutually inconsistent. For instance in the column whether the vehicle was plying for hire, the reply was in the negative. The spot inspection, however, revealed that the vehicle was empty at the time of accident and three unauthorised passengers, who were travelling in the truck, had died in the accident. The complainant had failed to produce satisfactory evidence to prove that the three occupants, who died, were covered in the category of persons falling within the purview of the Workman's Compensation Act. The exclusion clause, therefore, operated and Insurance Company was not liable to pay the claim. Reliance was placed by the Insurance Company on the decision of the National Commission in Oriental Insurance Company Ltd. V/s. Nagaraju first appeal No.439 of 1993. Further according to the Insurance Company the offer to settle on substandard basis had been made after obtaining legal opinion, due application of mind and without any delay attributable to the Insurance Company and the complaint was liable to be dismissed.

(3.) We have heard Mr. G. N. Rathi, Advocate for the complainants and Mr. Karnail Singh, Advocate for the opposite party. We have also perused the record of the case as also affidavit of Smt. Kamlesh Vashisht, Dy. Manager of the respondent company by way of written submissions.