UNATTENDING DAMAGED VEHICLE – FATAL TO THE INSURANCE CLAIMS?

[Mr. M. GOVINDARAJAN]

In RAJESH KUMAR VERSUS NATIONAL INSURANCE CO. LTD. - 2024 (12) TMI 1014 - SUPREME COURT, the appellant, in this case, purchased a private car insurance policy from the National Insurance Company Limited. The policy was valid from 02.07.2012 to 01.07.2013. The policy is to compensate the appellant in case of accident. The maximum amount that could be got as compensation is Rs.5,02,285/- in case of accident. The said vehicle met with an accident 25.03.2013 when the appellant drove the car a cow suddenly turned before the car. The appellant tried to avoid to hurt the cow the appellant made a sudden turn which resulted in the fall of the car in a ditch. At that time another person accompanied him. Both suffered with injuries. The appellant that another person suffered a lot and considered to give him treatment immediately. The appellant rushed to take him to the hospital without caring the vehicle which is in ditch. One of the wires short circuited the result of which the car was burnt substantially.

The appellant reported the accident to the police. He made a claim to the respondent insurance company on 28.03.2013. The respondent appointed a surveyor to determine the damage. The surveyor assessed the damage as Rs. 53,543.97. The report further provided that the damage occurred due to the omission of the appellant to take care of the car. Therefore, the respondent denied the claim of the appellant.

The appellant filed a complaint before the District Consumer Redressal forum (‘District Forum’ for short) against the respondent company claiming Rs.5,02,285/- towards the insured value of the vehicle. The District Forum observed that the appellant reported the accident to the police promptly. Therefore, his claim is a genuine one. Even assuming the short-circuiting could have been avoided by monitoring the vehicle, the appellant would still be entitled to insurance amount on a non-standard basis, that is, with minimal deduction. The delay in intimating the insurer was caused due to the appellant’s attempts to rescue his co-passenger. The same could not be a fatal to the claim of the appellant. The District Forum partly allowed the complaint and directed the respondent to pay 75% of the insurance amount i.e., Rs.3,76,713/-.

The appellant as well as the respondent filed appeals before the State Consumer Disputes Redressal Commission (‘State Commission’ for short). The State Commission allowed the appeal filed by the appellant and directed the respondent to release the entire insured sum to the appellant.

The respondent, being aggrieved against the order of State Commission, field a revision petition before the National Consumer Disputes Redressal Commission (‘National Commission’ for short) against the order of State Commission. The National Commissioner allowed the appeal filed by the respondent. The National Commission upheld the findings of the District Forum and State Commission that the delay in reporting to the police is not a fatal to the claim. However, the National Commission relied on condition No. 4 of the policy, according to which the vehicle could not have been left unattended by an insured and if further damage is done because the vehicle is unattended and proper precaution is not taken, then claim is beyond the insurance cover. Hence, it held that the damage due to short-circuiting was not payable and the only amount that needed to be paid by the respondent was the damage attributed solely to the accident on 25.03.2013, and not to the short-circuiting following the accident. The National Commission reduced the damage to Rs.53,543/-.

The appellant challenged the order of National Commission before the Supreme Court in the present appeal. The appellant contended that the National Commission went beyond the scope of its revisional jurisdiction. in cases of insurance pertaining to motor vehicle accidents, the liability of the insurer must be interpreted strictly. The respondent contended that the National Commission had correctly exercised its revisional jurisdiction. The Authorities below disregarded the survey report, which is patently erroneous. The District Commission also found that the vehicle was left unattended by the appellant however, the State Commission did not answer the question as to why the vehicle was left exposed to further damage for a period of three days. the National Commission correctly applied Condition No. 4 of the policy in excluding the damage caused by the short-circuiting.

The Supreme Court considered the submissions of both the parties. The Supreme Court observed that both the District and State Commissions had reached a concurrent finding about whether the delay in intimation to the respondent was justified. Both the courts

had also reached the finding that the damage took place in two phases:

• once when the vehicle fell into a ditch and capsized; and
• then the short-circuiting took place due to the car remaining in that state.

The Supreme Court observed that there is nothing to indicate in the decision of the National Commission as to whether there is any illegality in the approach adopted by the State Commission or that it had acted with material irregularity. the surveyor’s claim that the vehicle was left unattended cannot be accepted since the appellant had justifiable reasons for the same. the finding of the surveyor that the short-circuiting was caused by the appellant himself was not based on any evidence. If a document has already been considered and rejected by the State Commission, a revision does not lie merely because the National Commission has a different view on the same. In cases where the courts below have reached findings on facts, the jurisdiction of revision is very limited and must be invoked only when there is a patent illegality in the findings. The State Commission has addressed all the issues raised before it and found the delay in intimation to be reasonable and that the insurance claim is payable on the damage due to the accident as well as the short-circuiting. The State Commission also examined the genuineness of the accident’s claim by considering the police report and discarded the surveyor’s report for lack of evidence. The approach of the State Commission is also correct in interpreting and disapplying Condition no. 4 of the insurance policy. The Supreme Court explained the principles of interpreting and applying exclusionary clauses in insurance policy. Condition No. 4 merely prescribed that in the event of any accident, the vehicle shall not be left unattended without proper precaution being taken.

The Supreme Court observed that the appellant was acting under compelling circumstances when he had to take his co-passenger to a hospital immediately as his condition was precarious. It is also difficult to imagine that how he could have prevented short-circuiting of the vehicle which had fallen into a ditch.

The National Commission allowed the appeal and restored the order of the State Commission. The National Commission directed the respondent to release the entire insured declared value of Rs.5,02,285/- to the appellant with 9% interest from the date of complaint to the date of realization.