Case: New India Assurance Co. Ltd Vs. Prabhu Lal

In all these appeals, a common question of law has been raised by the parties. It is, therefore, appropriate if we deal with and decide all the appeals by a common judgment. In all the three appeals, the claim of the claimant has been upheld finally by the National Consumer Disputes Redressal Commission, New Delhi (National Commission for short) which has been challenged by the Insurance Company in thisappreciate the controversy, it would be appropriate if we narrate the facts in the first case i.e. New India Assurance Co. Ltd. v. Prabhucomplaint 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 vehicle-Tata 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 Narain-brother 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 surveyInsurance 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 theto 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 thecase 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 beTata 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 notDistrict Forum, after considering the rival contentions of the parties and referring to the case law on the point, particularly a decision of this Court in Ashok Gangadhar Maratha v. Oriental Insurance Co. Ltd., (1999) 6 SCC 620 , held that the complainant was not entitled to compensation. According to the District Forum, in Ashok Gangadhar, this Court held that if the driver was having effective driving licence to ply Light Motor Vehicle (LMV), he could not have plied Heavy Motor Vehicle (HMV) or Transport Vehicle. The District Forum observed that from the evidence on record, it was proved that at the time of accident, Ram Narain was plying the vehicle in question and not Mohd. Julfikar as asserted. Ram Narain was having valid and effective driving licence to ply Light Motor Vehicle and as such he could not have plied the transport vehicle. The claim was, therefore, not enable and accordingly the complaint wasaggrieved 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%Insurance Company approached National Forum against the order passed by the State Commission but the National Commission also dismissed the Revision and confirmed the order passed by the State Commission. It is this order which is challenged in this Court.

Court's reasoning:
In the present case, all the facts were before the District Forum. It considered the assertion of the complainant and defence of the Insurance Company in the light of the relevant documentary evidence and held that it was established that the vehicle which met with an accident was a transport vehicle. Ram Narain was having a licence to drive Light Motor Vehicle only and there was no endorsement as required by Section 3 of the Act read with Rule 16 of the Rules and Form No.6. In view of necessary documents on record, the Insurance Company was right in submitting that Ashok Gangadhar does not apply to the case on hand and the Insurance Company was notour 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