Case: Bharti AXA General Insurance Co. Ltd Vs. Priya Paul &amp; Anr

2. The brief facts leading to the instant appeal are as follows:2.1 Respondent No. 1 had gone on vacation to Canada along with her family in June 2013. On 29.06.2013, the family visited the Pemberton Soaring Centre, a gliding facility at Pemberton in British Columbia. Her son took the first turn for a sightseeing flight on a two-seater glider plane (Stemme S10-VT) flown by the pilot at the facility. While airborne, the glider exploded after colliding with a Cessna 150 aircraft, killing all occupants of both the glider and the Cessna. Respondent No. 1 filed a claim with the Appellant based on the Smart-Personal Accident-Individual Insurance Policy (the Policy) taken by the deceased. The claim was repudiated on the basis that the deceased was travelling in a motorized glider for sightseeing, and hence was not travelling in a standard aircraft, and was further not a fare-paying passenger in any regular scheduled airline or air charter company, which excluded the accident from the purview of the Policy. We may refer to the relevant provisions of the Policy in this regard:7. General Exclusions of the PolicyPROVIDED ALWAYS THAT the Company shall not be liable under this policy for-ix) Any claim in respect of accidental death or permanent disablement of the Insured/Insured Person:iii) whilst engaging in aviation or ballooning whilst mounting into, dismounting from or traveling in any aircraft or balloon other than as a passenger (fare paying or otherwise) in any duly licensed standard type of aircraft anywhere in the worldxiv) Insured/insured person whilst flying or taking part in aerial activities (including cabin crew) except as a fare-paying passenger in a regular scheduled airline or air charter company2.2 A complaint was filed with the National Commission on 3.2.2015, which allowed the same, directing the insurer to pay an amount of Rs. 1 crore with interest at the rate of 8% per annum. The National Commission held that a glider was an aircraft under Section 2(1) of the Aircrafts Act, 1934 (the 1934 Act) and had not been expressly excluded under the Policy, unlike activities like hang-gliding and paragliding. Next, the National Commission held that the glider was a duly licensed aircraft, since the Pemberton Soaring Centre had a licence to conduct the business of sightseeing glider flights, and there was no evidence of a licence being required for individual aircraft under law apart from a private registration, which had been done for the glider in question, as evident from the aviation inspection report of the Transport Safety Board of Canada (the TSBC Report), which had also extensively referred to the glider as an aircraft2.3 It was also held that the glider was a standard type of aircraft, placing the onus of bringing the case within an exclusionary clause on the insurer, who had failed to produce any certificate from the Canadian or Indian aviation authorities, or rule or regulation which defined a standard aircraft, in the absence of a contractual definition of the term, and particularly since it was noted in the TSBC report that the glider was certified, equipped, and maintained in accordance with existing regulations and approved procedures2.4 The Commission was also of the opinion that a person undertaking a round trip without a destination would also qualify as a passenger, and that the deceased was a fare-paying passenger on a sightseeing flight, and had taken the aircraft on hire. Considering the definition of charter in the Blacks Law Dictionary, which includes the hiring or leasing of a vessel such as an airplane, and the fact that charges were payable by the deceased for flying in the glider, the Commission also concluded that the plane was given out on hire by the Pemberton Soaring Company pursuant to its business, and it was an air charter company. The Commission declined from placing reliance on alleged correspondence with the attorney of the owner of the Pemberton Soaring Company confirming that the accident did not fall into the purview of the Policy, for being hearsay2.5 Aggrieved by this decision, the instant appeal was filed by the insurer.

Reasoning: 7. There is no dispute that the deceased was engaging in the activity of gliding, which is an aviation/aerial activity which would fall within the exclusion envisaged under Clauses 7(ix)(iii) and 7(xiv) of the Policy. The impugned judgment would be liable to be confirmed if we determine that the gliding activity in question falls within the exemptions to the exclusions envisaged under these two clauses, that is to say, the deceased was travelling in a duly licensed standard type of aircraft, bringing him out of the exclusion in Clause 7(ix)(iii), and that he was travelling as a fare-paying passenger in an air charter company or regular scheduled airline, bringing him out of the scope of the exclusion in Clause 7(xiv). Both these clauses must be satisfied in order to evade exclusion from the Policy8.5 It becomes important to note at this juncture that though the glider in question was equipped with an engine, this was mainly for the purpose of adding self-launching capacity to the vehicle, as evident from the TSBC Report. Be that as it may, the fact that the glider was motorised would not imply that it was not an aircraft at all. Even the TSBC Report unequivocally refers to the glider as an aircraft repeatedly. Importantly, the terms aircraft and glider have not been defined within the Policy. In such circumstances, we are of the view that the glider in question must be regarded as an aircraft under the PolicyWe begin by noting that the Policy itself does not define what a standard type of aircraft is, and we are at a loss to understand the context in which the term has been employed in the Policy. Much of the argument advanced by the learned Counsel for the Appellant to distinguish between power-driven and non-power driven aircraft as being standard and non-standard relies upon common parlance; however, apart from this submission, learned Counsel has not been able to explain the exact meaning of the term standard type of aircraft9.1 The nature of conventional gliders as not being powerdriven has not been seriously disputed before us. Thus, we find it unnecessary to refer to the extensive literature relied upon by the Appellant to establish the mechanics of a gliders flight9.6 Thus, it is clear that no uniform requirement of flying experience is prescribed for one set of aircraft as opposed to another; on the other hand, different requirements are prescribed for different types of aircraft9.7 Interestingly, there is a distinction maintained under Rule 48 between the fees payable for student pilots licences and glider licences on one hand and remaining licences on the other, for the purpose of issuance, validation or renewal of licences. It is also relevant to note that a common student licence is envisaged for aeroplanes, helicopters and gliders, while separate student licences are prescribed for microlight aircraft and balloons9.8 In our considered opinion, the above scheme shows that the 1937 Rules do not maintain any uniform categorisation between powered and non-powered aircraft, far from terming any of these as standard or non-standard. It does not appear to be the case that one set of rules is prescribed for powered aircraft, and another distinct set for non-powered aircraft. Thus, no reliance can be placed on the Rules to further the Appellants contention in this respect9.9 As far as the Canadian regime is concerned, no particular statutory provision was brought to our attention in this regard by either party. We may observe that the TSBC Report notes that the pilot of the glider had a private pilot licence for aeroplanes, valid for single-engine land aircraft, as well as a separate glider pilot licence. However, this distinction per se does not support the argument of the Appellant, since a brief perusal of the Canadian Aviation Regulations (SOR/96-433) reveals that under the Canadian regime as well, a distinction of the nature submitted by the Appellant has not been maintained. To take the licence regime as an example again, the regulations provide for several kinds of licences, which do not seem to be categorised on the basis of the powered or non-powered nature of the aircraft. For instance, the regulations provide for airline transport licences, commercial licences, and private pilot licences for aeroplanes; airline transport licences, commercial licences, and private pilot licences for helicopters; glider pilot licences; and pilot permits for gyroplanes, ultra-light aeroplanes, and so on9.10 From the above discussion, it is evident that no rigid distinction can be culled out between standard and nonstandard aircraft. Though the Appellant in this case submits that this distinction can be drawn on the basis of whether the aircraft is power-driven or not, it can equally be argued that the term standard aircraft connotes only aeroplanes, or only aeroplanes and helicopters, or even includes microlight aircraft, and so on. The usage of as vague a phrase as standard type of aircraft in the Policy, thus, suggests to us that the same must be construed in a liberal manner so as to benefit the insured9.11 In the instant case, we agree with the conclusion of the National Commission that had the insurer really intended to exclude gliding activity from the purview of the Policy, it could have done so expressly, similar to the manner in which hanggliding and para-gliding were excluded in Clause 7(xiii) of the Policy. Similarly, the insurer could have also defined the phrase standard type of aircraft for the purpose of the Policy, but it chose not to do so. In these circumstances, it is not open to the insurer to reject a claim arising out of a glider accident by now arguing that a glider is not a standard aircraft by virtue of not principally being a powered aircraft. We are therefore compelled to conclude that regardless of whether the glider involved in the accident was powered or non-powered, motorised or nonmotorised, it was a standard type of aircraft envisioned in the PolicyIn this regard, it may be noted that the National Commission specifically took note of the Appellants submission that the licence produced before the Commission was only a municipal business licence to be taken necessarily by any business-owner seeking to conduct a business in the municipal limits of Pemberton. The Commission went on to find that there was no evidence of a licence being required in respect of each aircraft/glider, and the private registration undertaken with respect to the glider in question, in addition to the municipal business licence, was sufficient compliance with the requirement of the aircraft being duly licensed10.1 We find ourselves in agreement with the National Commission in this regard. We have perused the business licence on record, as well as the observation in the TSBC Report that the the glider was registered privately, carrying registration as CFHAB, with serial number 11-016. We are moreover conscious of the specific finding in the TSBC Report that the glider was certified, equipped and maintained in accordance with existing regulations and approved procedures, and compliant with rules such as the Visual Flight Rules. The Report further observes that even the pilot of the glider was certified and qualified for the flight as per existing regulations, indicating that such separate glider pilot licence was in accordance with the legal requirements. Thus, we conclude that it was rightly held that the aircraft in question was duly licensedWe are of the view that the National Commission rightly disregarded this communication, though spoken to by the Managing Director of Diligence on affidavit, being hearsay evidence in nature. No affidavit from Mr. Taylor himself was placed on record, and indeed, there is nothing to show that he in fact was the attorney of Ms. Rozsypalek. Thus, no reliance can be placed on the alleged communication with Mr. TaylorWe are inclined to disregard these records, as the investigation based on which such records were collected was commissioned by the insurer after the impugned decision of the National Commission dated 22.05.2017, and more so after Diligence had already submitted an investigation report prior thereto. As per the second report itself, the first report was submitted on 03.02.2014, and the Appellant instructed Diligence to re-open investigation into the case on 20.02.2018, four years later, specifically on the question of whether the Pemberton Soaring Centre was an air charter company or regular scheduled airline. In our considered opinion, the information that the Appellant now seeks to rely upon could easily have been obtained by it at the time of the first investigation by Diligence, and could have been placed before the National Commission. Particularly in view of the long lapse of time before the second report was commissioned, we are of the opinion that it is not open to the Appellant to place reliance upon the same at this stage11.2 We are cognizant of the fact that the term air charter company has not been defined within the policy, and the National Commission, while concluding that the Pemberton Soaring Centre was an air charter company, relied upon the dictionary meaning of the word charter, which connotes the hiring or lease of the entirety of a vessel. It appears that such term is not defined within any Canadian or Indian regulation, and indeed, no material has been placed on record regarding the regulatory regime governing domestic chartered flights in India, Canada, or any other jurisdiction. However, to throw light on the scope of air charter services, we may refer to international materials discussing the same, referring in particular to the definitions adopted by the International Civil Aviation Organisation (the ICAO)11.3 Any discussion on charter flights must first begin by differentiating between scheduled and non-scheduled flights. The ICAO essentially defines scheduled flights as those which are scheduled and performed as per a fixed timetable, or are so regular and frequent so as to constitute a recognizably systematic series, and are open to direct bookings by members of the public11.5 It is undisputed in the instant case that the glider in question could seat only two persons. Thus, in offering sightseeing services on a glider plane for a fixed consideration, the Pemberton Soaring Centre gave out the entirety of the aircraft on hire for the duration of the aerial journey, though one seat was reserved for the pilot. In our considered opinion, this practice may constitute an own-use charter. Moreover, we note that there is no dispute that the Pemberton Soaring Centre was an incorporated company. Keeping in mind that the Appellant has itself omitted to define what it means by an air charter company in the Policy, we are again, for the purposes of the Policy, inclined to extend the benefit of the ambiguity in the meaning of the term to the claimant. Thus, we affirm the National Commissions finding that the Pemberton Soaring Centre was an air charter company within the meaning of clause 7(xiv) of the PolicyWe find no force in the Appellants contention that the deceased was not a passenger merely because the journey was supposed to begin and terminate at the same location; indeed, this contention was duly dealt with and rejected by the National Commission. Needless to say, the purpose of the journey was to fly over various scenic spots, and after completion, the glider was to return to a designated location, presumably from where it took off. As noted by the National Commission, this would not be dissimilar to how a sightseeing bus might originate and terminate its journey at the same spot after passing by various places of interest. We find it difficult to conclude that a person undertaking such a journey would not amount to a passenger12.1 Further, it is evident from the record that the journey on the glider was undertaken for a fixed consideration, though the ticket for the same has not been placed on record. Thus, we affirm the National Commissions finding that the deceased was a fare- paying passenger on the glider in question13. In view of the above discussion, we find that the accident out of which the instant claim arose was completely covered under the ambit of the Policy, since the deceased was travelling in a duly licensed standard type of aircraft, which brings him out of the exclusion in Clause 7(ix)(iii), and was travelling as a fare-paying passenger in a flight of an air charter company, bringing him out of the scope of the exclusion in Clause 7(xiv). Thus, we find no reason to interfere with the impugned judgment, which found that the Appellant wrongly repudiated the claim filed by Respondent No. 1.