Insurance Claim Rejected for not having Valid Licence

Insurance Claim Rejected for not having Valid Licence

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This post is a summary of judgment wherein consumer complaint was preferred against United India Insurance Company Limited in State Consumer Disputes Redressal Commission Punjab, Chandigarh in respect of issue related to repudiation of claim made by the owner of the vehicle which is duly insured with the Company, solely on the ground the driver of the vehicle who had nothing to do with the accident did not hold a valid licence.

STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

PUNJAB, CHANDIGARH.

Date of institution:    29.10.2018Date of decision:       07.03.2019CASE: Rajinder Sharma vs United India Insurance Company … on 7 March, 2019

Parties to Suit:

Complainant-

Rajinder Sharma S/o Sh. Jiya Lal, R/o H.No.5785, Street No.4, 1/2

Gobind Nagar, Daba Road, New Shimlapuri, Ludhiana, Punjab (owner

of vehicle).

Oppositions-

  1. United India Insurance Company Limited, Branch Office, situated at R.K. Road, 354, 3rd Floor, Bhagwati Tower, Industrial Area-A, Ludhiana-141003, Punjab, through its Branch Manager. (Agent ID:[email protected])
  2. United India Insurance Company Limited, Service Hub, situated at Surya Tower, 108, The Mall, Ludhiana, through its In-charge Service Hub.
  3. United India Insurance Company Limited, Regional Office, situated at 136, 1st Floor, Feroze Gandhi Market, Ludhiana, through its Chief Regional Manager.
  4. United India Insurance Company Limited, Registered & Head Office at 24, Whites Road, Chennai-600014, through its Grievance Officer (Legal Department) ([email protected]).

Bench- Hon’ble Mr. Justice Paramjeet Singh Dhaliwal, President 

Background Facts-

  1. The complainant deals in the business of transportation of goods from one part of the country to another and to facilitate his business, he purchased one trailer make Tata 4018 bearing Registration No.PB-10 FF-9971 Model 2016, Chassis No.MAT447224G5E07812 and Engine No.61D84304704.
  2. He got the said vehicle insured from opposite party No.4, vide Insurance Policy No.20140131169102860908; which was valid from 27.05.2016 to 26.05.2017. He had sent the said trailer for transportation of goods (1160 bags of plastic Dana weighing 29 tons) from Mudra Port (Gujarat) to Baddi (Himachal Pradesh), along with driver namely Anil Kumar son of Sh. Mahavir Singh, R/o VPO Lodhar, Tehsil Narwana, District Jind, Haryana and helper Sh. Gurwinder Singh @ Lalli son of Sh. Ram Kumar on 15.02.2017.
  3. On 17.02.2017, when the trailer reached Pachpadra, District Barmer, Rajasthan at about 4.00 A.M., its tyre got punctured. Since it was early morning and no shops of mechanic were open, the driver parked the same on the roadside and went to sleep inside the cabin thereof, along with helper Gurwinder Singh @ Lalli. After some time, a short circuit occurred in the trailier, as a result of which it caught fire; which spread all around the trailer. Feeling smell of burning, the driver and the helper woke up and saved themselves by jumping out of the vehicle.
  4. As a result of fire, the vehicle was completely damaged and the goods loaded therein being of plastic added fuel to the fire and those were also completely burnt/destroyed.
  5. Information regarding the said incident was given to nearest Police Station, Pachpadra, District Barmer, Rajasthan as well as to the Fire Brigade Department at Balotra by Anil Kumar, driver immediately.
  6. The driver, vide letter dated 19.02.2017, also urged the Police Station, Pachpadra to lodge DDR, which was later on lodged at No.818 dated 20.02.2017. Thereafter the claim was lodged with opposite party No.1 immediately, after completing all the formalities; who deputed surveyor for spot survey and assessment of loss.
  7. The spot survey report dated 22.02.2017 was issued by the surveyor Sh. Sanjay Singhal and loss assessing report dated 27.03.2017 was issued by Sh. Sunil Mathur, stating that the complainant suffered a loss of ₹27 lacs approximately.
  8. The complainant submitted all the necessary and requisite documents, including bills, photographs and other documents, showing the estimate of loss to the opposite parties in the first week of March, 2017, but they refused to give actual status of the claim.
  9. Later on the complainant sent a legal notice dated 18.01.2018 to the opposite parties, calling upon them to release the claim amount. However, his claim was rejected as “No Claim”, vide letter dated 19.03.2018, which was received by him on 07.04.2018, on unreasonable grounds that on the date of occurrence, the vehicle, in question, was being driven by Sh. Gurwinder Singh and Sh. Darshan Singh was helper thereon, whereas the complainant alleged Anil Kumar to be driver of the vehicle. It was also mentioned therein that driver Gurwinder Singh was not having valid and effective driving licence at the time of incident.
  10. Thereafter, the complainant filed a complaint against repudiation of claim before the Grievance Redressal Officer of opposite party No.3, but the same was not considered. Later on, the complainant obtained the copy of investigation report under RTI Acton 06.10.2018, the findings of which were false and imaginary.
  11. In the DDR, name of driver Anil Kumar is reflected. In the survey and assessment reports also, the name of driver is given as Anil Kumar. The genuine claim of the complainant was not paid despite repeated requests. The aforesaid act and conduct of the opposite parties amount to deficiency in service. Hence, the present complaint.

Issue Involved:

Can the Insurance Company repudiate a claim made by the owner of the vehicle which is duly insured with the Company, solely on the ground the driver of the vehicle who had nothing to do with the accident did not hold a valid licence? 

Defence by Opposite Party:

  1. Upon notice, opposite parties No.1 to 4 appeared and filed their joint reply to the complaint, raising preliminary objections that the complaint is not maintainable and this Commission has no jurisdiction to decide the same.
  2. The complainant obtained insurance for the vehicle, in question, for commercial purpose and, as such, he does not fall under the definition of ‘consumer’, as defined in the Act. Disputed and complicated questions of facts and law are involved in the complaint, which can only be decided by the Civil Court.
  3. The complaint is liable to be dismissed on account of non-joinder of financer i.e. ICICI Bank Ltd., Ludhiana; with whom the vehicle, in question, was hypothecated. Certificate of insurance for “GCV, Public Career Other Than Three-wheeler Package Policy”, along with terms and conditions was issued in the name of the complainant for a sum of ₹24,70,000/-.
  4. The claim of the complainant was repudiated, vide letter dated 19.03.2018, on the grounds mentioned in the complaint. The Insurance Company appointed Sh. Vijay Kumar Gaur to investigate the facts with regard to accident, who submitted his report dated 12.08.2017, stating that the vehicle was driven by Gurwinder Singh, as this fact was mentioned in the report No.692 dated 17.02.2017 of Police Station, Pachpadra.
  5. The Insurance Company also appointed Sh. Sunil Mathur as Final Motor Surveyor, who in his report dated 27.03.2017 stated that the vehicle got burnt, due to sudden short circuit in wiring harness, while running and that the net liability on “Net of Salvage Basis” comes to ₹21,18,500/-.
  6. On merits, taking of the insurance policy for the period and for the sum insured, as mentioned in the complaint, were admitted. Incident of fire was also admitted. It was pleaded that the surveyor and the investigator reported that the vehicle was being driven by Gurwinder Singh @ Lalli, while it was running on the road.
  7. The complainant did not produce the driving licence of Gurwinder Singh @ Lalli and, thus, the Insurance Company is not liable to indemnify the loss suffered by him. Other similar pleas, as raised in the preliminary objections, were reiterated. All other allegations levelled in the complaint were denied and it was prayed that the complaint be dismissed Evidence of the Parties.

Judgment:

Court’s Order-

the complaint was allowed, with special costs of ₹22,000/- payable to the complainant, and following directions are issued to the opposite parties:

  1. i) to pay the insurance claim of ₹21,18,500/- to the complainant, on “Net of Salvage Basis”, along with interest at the rate of 7% per annum from the date of repudiation of the claim i.e. 19.03.2018 till realization; and
  2. ii) to pay litigation expenses of ₹22,000/-.

The compliance of this order shall be made by the opposite parties within a period of 30 days of the receipt of certified copy of the order.

Case Sited by Court-

  1. United India Insurance Co. Ltd. vs Paramjit Kumar 2012 (4) CPJ 506

In this case it was held that at the time of incident, the vehicle was stationary as per affidavit of the petitioner and, as such, the validity of the driving licence has no relevance when the vehicle caught fire due to short circuit.

So, taking the view of authorities in above case the present Justice laid down that the repudiation of the claim of the complainant by the opposite parties, on the ground that the driver was not holding valid and effective driving licence at the time of incident, is wrong and illegal.

  1. Jitendra Kumar Vaishnav vs B.M, The Oriental Insurance 2003 AIR (SC) 4161

Supreme Court in the present case held that fire was caused due to mechanical failure and not due to any fault or act, or omission of the driver and, as such, the claim cannot be repudiated on the ground that the driver did not have valid licence.

For case specific advice, please connect with Top Best Expert Legal Consultants Attorneys in Real Estate/Property Estate/Consumer Court and Consumer Protection Dispute/ Consumer Grievances and Complaints/RERA Lawyers Advocates in Chandigarh Panchkula Mohali Kharar Derabassi Zirakpur etc.

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