New India Assurance Co. Ltd vs Prabhu Lal

3. To appreciate the controversy, it would be appropriate if we narrate the facts in the first case i.e. New India Assurance Co. Ltd. v. Prabhu Lal.

4. A complaint was filed by the complainant Prabhu Lal under Section 12 of the Consumer Protection Act, 1986 before the District Consumer Disputes Redressal Forum, Kota (Rajasthan) ('District Forum' for short) claiming compensation from the respondent Insurance Company as also from Tata Finance Limited, Jaipur. The case of the complainant was that he purchased a vehicleTata 709 with Registration No. RJ-20G-2828 from Tata Finance Limited, Jaipur. The insurance was taken from New India Assurance Company effective from October 17, 1997 to October 16, 1998. Premium amount of Rs.8235/- was duly paid. It was the case of the complainant that on April 17, 1998, the vehicle of the complainant was being driven by Mohd. Julfikar to Indore for getting Chilly. At about 4.30 a.m. in the early morning, the driver of Roadways Bus No. MP 13-C-3935 drove the bus with very high speed in rash and negligent manner which resulted in an accident at Yashwant Nagar. Due to said accident, Ram Narainbrother of the complainant who was sitting with Mohd. Julfikar, sustained injuries. Mohd. Julfikar immediately ran away leaving the vehicle but as Ram Narain received serious injuries, he could not come out of the vehicle. The complainant lodged First Information Report (FIR) No. 131 of 1998 with the Manpur Police Station, Yashwant Nagar, District Indore under Sections 279 and 337 of the Indian Penal Code (IPC) against driver Kalu of M.P. Roadways Bus. Vehicle of the complainant was then inspected by Tatas, estimate was prepared and claim was submitted in the prescribed form by the complainant to the Insurance Company on June 12, 1998. The amount of the claim was, however, not paid to the complainant. The complainant, therefore, moved the District Forum praying for an award of Rs.4,70,000/- towards the claim of vehicle, Rs.15,000/- towards mental agony, Rs.5,000/- towards driving charges of the vehicle from Indore to Kota and Rs.25,000/- for survey fee.

5. The Insurance Company filed its reply refuting the claim of the complainant. According to the Company, it had not committed any deficiency in rendering 'service'. It was also the case of the Company that it had fulfilled all contractual obligations as to claim. The Company informed the complainant about its decision on December 21, 1999 stating that the claim was not allowable and the amount was not payable. The Insurance Company, therefore, prayed for the dismissal of the complaint.

6. According to the District Forum, the main question was whether the Insurance Company was deficient in rendering service and wrongly disallowed insurance claim of the complainant. The Forum considered the question and heard the parties. According the complainant, at the time of accident, vehicle was driven by Mohd. Julfikar who was having a licence to drive Light Motor Vehicle (LMV) as also Heavy Motor Vehicle (HMV). In spite of it, the Insurance Company disallowed the insurance claim of the complainant on the ground that the driver was not having valid driving licence to drive the vehicle in question. It was also the contention of the complainant that certain documents produced by the Insurance Company were not genuine. The complainant was not an educated man and he knew only how to sign. If the officials of Insurance Company had obtained signatures of the complainant on certain documents without reading over to him and making him properly understood, the complainant should not suffer. According to the complainant, Insurance Company wrongly presumed and proceeded on the basis that the vehicle was driven by Ram Narain at the time of accident, who was having a valid driving licence to drive only Light Motor Vehicle and negatived the claim. It was, therefore, prayed that an award be passed in favour of the complainant.

7. The case of the Insurance Company, on the other hand, was that the vehicle in question, at the time of accident, was driven by Ram Narain, brother of the complainant. Admittedly, Ram Narain was possessing licence to drive Light Motor Vehicle and not Heavy Motor Vehicle. He, therefore, could not have driven Transport Vehicle in absence of necessary endorsement as required and the Insurance Company could not be held liable. In this connection, Insurance Company relied on the permit issued by Transport Authority, the Form submitted by the complainant, licence issued and other documents. The Insurance Company also relied upon FIR filed at Police Station, Manpur, wherein it was stated that the vehicle was driven by Ram Narain. Moreover, when the officers of the Insurance Company approached the complainant, they were informed by the complainant that the vehicle was driven by Ram Narain. As an after thought, only with a view to get the amount of compensation, it was asserted and a case had been put forward before the Consumer Forum that the vehicle was driven by Mohd. Julfikar. It was contended that the complainant realized belatedly that if true facts would be placed before the Forum, in view of legal position, he would not be able to get any amount from the Insurance Company. It was, therefore, asserted that Mohd. Julfikar was driving the vehicle but it was not true. The Insurance Company, hence, submitted that there was no deficiency in rendering service by the Company and the claim was liable to be dismissed.

8. The Tata Finance Limited, Jaipur in its reply stated that the complainant had purchased the vehicle on the basis of Hire Purchase Agreement and the amount was to be paid in instalments. At the time of incident, Rs.3,65,026/- were due and payable to the Company. Until the full amount was paid, the Financer was to remain owner of the vehicle. It was also stated that though Tata Finance Company requested the Insurance Company several times to make payment of the balance hire purchase amount, it was not done.

10. Being aggrieved by the order passed by the District Forum, the claimant approached the Consumer Disputes Redressal Commission of Rajasthan, Jaipur ('State Commission' for short). The State Commission held that the principle laid down in Ashok Gangadhar would apply. But according to the State Commission, the District Forum was not right in dismissing the claim observing that the said decision was against the complainant. In fact, the point was decided in favour of the complainant and the complainant-claimant would be entitled to the benefit of the judgment and the Insurance Company must be held liable. Accordingly, the appeal was allowed. The order passed by the District Forum was set aside and the Insurance Company was ordered to pay the amount mentioned in the operative part of the judgment along with interest at the rate of 15% p.a.

12. On April 23, 2004, notice was issued by the Court. It appears that meanwhile in other matters, a similar question came up before this Court and hence all the matters were ordered to be placed for hearing together.

25. The second question is as to who was driving the vehicle which collided with M.P. Roadways Bus on April 17, 1998. In this connection, it may be stated that it was the case of the complainant that the vehicle (Tata

27. The District Forum, as observed earlier, considered the assertion of the complainant and the defence of the Insurance Company as to who was driving Tata 709 and on the basis of overall evidence adduced before it, held that it was Ram Narain who was driving the vehicle that met with an accident. The said Ram Narain was not having licence to drive transport vehicle and as such, Insurance Company was not liable. The District Forum noted that in the FIR lodged in respect of the accident, Ram Narain was shown to be the driver of the vehicle. Not only that but the evidence adduced before the District Forum also went to show that at the time of accident, Ram Narain was the driver of the insured vehicle. The argument of the complainant that the officials of the Insurance Company obtained his signatures on some documents without reading them over and making the claimant to understand the contents thereof was negatived. The assertion of the complainant that he was 'illiterate' and was knowing only how to put his signature was also not believed by the District Forum. The said finding of fact has not been set aside either by the State Commission or by the National Commission. Even otherwise, from the evidence on record, we are satisfied that it was Ram Narain who was driving the vehicle at the time of accident. We have, therefore, to proceed to consider whether the complainant was entitled to claim compensation from the Insurance Company in such an eventuality.

(emphasis supplied)

42. For the aforesaid reasons, in our opinion, the conclusion arrived at by the District Forum cannot be said to be faulty and it was right in holding that on the basis of the evidence adduced by the Insurance Company, the complainant was not entitled to claim any compensation from the Insurance Company and Insurance Company cannot be held liable. The decision could not have been interfered with by the State Commission or by the National Commission and hence the orders of the State Commission and National Commission are liable to be set aside by restoring the order passed by the District Forum. we do accordingly.

43. The appeal is, therefore, allowed. The orders passed by the State Commission and National Commission are set aside and the order passed by the District Forum is restored.

46. For the foregoing reasons, all the three appeals are allowed and the orders passed against the Insurance Company are set aside holding that the Insurance Company cannot be held liable. There shall, however, be no order as to costs.