Lakhmi Chand vs Reliance General Insurance

The brief facts of the case which are required to appreciate the rival legal contentions advanced by the learned counsel appearing on behalf of the parties are stated in brief as hereunder:-

The appellant incurred expenses amounting to Rs.1,64,033/- for the repair of his vehicle and also informed the respondent- Company about the accident and damage caused to his vehicle. In this connection, the respondent- Company appointed one Mr. Atam Prakash Chawla, as the Surveyor to assess the damage caused to the said vehicle. After inspecting the vehicle, the Surveyor assessed the damage caused to the vehicle at Rs.90,000/-, whereas the appellant had preferred a claim for a sum of Rs.1,64,033/- with supporting bills. In addition to above, the respondent-Company appointed M/s Innovation Auto Risk Claim Manager for the purpose of investigation. According to the report of the investigator, five passengers were travelling in the goods-carrying vehicle, though the seating capacity of the vehicle as per the registration certificate was only 1+1. On the basis of findings of the said report, the respondent-Company vide letter dated 26.07.2010 rejected the claim of the appellant for the reason that the loss did not fall within the scope and purview of the insurance policy.

The respondent-Company filed a detailed written statement before the District Forum disputing the claim of the appellant. It took the plea that the complainant had violated the terms and conditions of the policy, as five passengers were travelling in the goods-carrying vehicle at the time of accident, whereas the permitted seating capacity of the motor vehicle of the appellant was only 1+1.

The District Forum on the basis of the pleadings of the parties and the materials on record considered the judgment of the National Commission in the case of National Insurance Co. Ltd. v. Pravinbhai D. Prajapati[1], wherein it was held that if the number of persons travelling in the vehicle at the time of the accident did not have a bearing on the cause of accident, then the mere factum of the presence of more persons in the vehicle would not disentitle the insured claimant from claiming compensation under the policy towards the repair charges of the vehicle paid by the appellant. The District Forum accordingly directed the respondent-Company to settle the claim of the appellant on non-standard basis upto 75% of the amount spent for effecting repairs to the damaged vehicle after taking into consideration the claim amount of Rs.1,64,033/-. The District Forum further directed the respondent-Company to settle the amount to be paid to the appellant along with interest at the rate of 9% per annum from the date of lodging of the claim by the appellant with the respondent-Company. The respondent-Company was further directed to pay Rs.2,000/- for rendering deficient service, causing mental agony and harassment and towards litigation expenses incurred by the appellant.

Accordingly, we allow these appeals and restore the judgment and order of District Forum. Further, we award a sum of Rs.25,000/- towards the cost of the litigation as the respondent-Company has unnecessarily litigated the matter up to this Court despite the clear pronouncement of law laid down by this Court on the question with regard to the violation of terms and conditions of the policy and burden of proof is on the insurer to prove the fact of such alleged breach of terms and conditions by the insured.

Since we have restored the judgment and order of District Forum, we direct the respondent-Company to pay the amount awarded by the District Forum with interest and the cost which we have awarded in these proceedings within six weeks from the date of the receipt of the copy of this judgment.

Civil Appeal No(s).49-50/2016 arising from SLP(C) Nos. 37534-37535/2013 LAKHMI CHAND Appellant(s) VERSUS RELIANCE GENERAL INSURANCE Respondent(s) Date : 07/01/2016 These appeals were called for pronouncement of JUDGMENT today.

For Appellant(s) Mr. Munawwar Naseem,Adv.

For Respondent(s) Mr. Garvesh Kabra,Adv.

Hon'ble Mr. Justice V.Gopala Gowda pronounced the judgment of the Bench comprising Hon'ble the Chief Justice and His Lordship.

Leave granted.

The appeals are allowed in terms of the signed Non-Reportable Judgment.

(Signed Non-Reportable judgment is placed on the file)