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Insurance policy

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Theft of a car – Immediate issuing of notice of theft is must = No notice was given immediately after the theft was occurred so the complainant is not entitled to any insurance claim = New India Assurance Co. Ltd.-vs- Ram Avtar= Published in http://164.100.72.12/ncdrcrep/judgement/00131111121816967FA14109.html

Theft of a car – Immediate issuing of notice of theft is must = No notice was given immediately after the theft was occurred so the complainant is not entitled to any insurance claim = It appeared that the Respondent/Complainant took almost one month to give intimation about the alleged theft with a view to hide various facts and avoid detection of the … Continue reading

Insurance – Insurance company agreed to insure timber – Timber washed away due to flood – Insurance company repudiated claim in 1988 -Complaint filed in 1994 – Dismissed by National Consumer Commission as time barred – On facts, held: On date of flood, there was no insurance policy in existence nor any commitment on behalf of insurance company to make payment – Even accepting the case at its very best that the period of limitation was 3 years under s.44 of the Limitation Act, the complaint was, even then, beyond time – No case made out for interference by Supreme Court – Limitation Act, 1963 – s.44. Contract Act, 1872 – s.28 – Contract of insurance – Clause providing for forfeiture or waiver of the right itself if no action was commenced within period stipulated – Held: Not violative of s.28 – Though curtailment of period of limitation is not permissible in view of s.28 but extinction of the right itself unless exercised within a specified time is permissible and can be enforced. Respondent insurance company agreed to insure timber lying in forest areas of the State and issued cover note followed by an insurance policy to be purportedly valid for one year from 6th November, 1987 onwards. The timber was washed away some time in September, 1988 on account of heavy rains and consequent large scale flooding in the State. When appellant laid claim before the respondent, the latter vide its communication dated 13th October 1988 refuted its liability and repudiated the claim contending that the insurance policy was issued for 8 months only starting from 6th November, 1987 and ending on 5th July, 1988 and the period of one year mentioned in the policy was on account of a typographical mistake. It is alleged that Respondent even accepted additional premium after the policy was repudiated and still declined to make good the loss. Appellant filed complaint before National Consumer Commission. The Complaint was dismissed as time barred having been filed after expiry of the 12 months period stipulated by Clause 6(ii) of the insurance policy. The order passed by the National Consumer Commission was challenged in the present appeal on grounds that Clause 6(ii) of the insurance policy could not be sustained being violative of s.28 of the Contract Act, 1872 and in any event s.44 of the Limitation Act, 1963 provided a limitation period of 3 years from the date of disclaimer. =Dismissing the appeal, the Court HELD:1. It is clear from the record that the timber had been washed away some time in September, 1988 and after prolonged correspondence, the respondent ultimately vide its communication dated 13th October, 1988 repudiated the appellant’s claim. It is also clear from the counter affidavit filed by the respondent that the appellant had, vide its letter dated 7th November 1987, asked for insurance cover for a period of 8 months and that the period of one year fixed in the insurance policy was evidently a typographical mistake which had, in any case, been rectified in the records of the company on 17th December 1987, that is long before the flood. The claim of the appellant that the respondent company had, even after the 13th October 1988, impliedly admitted its liability under the policy also appears to be incorrect as the surveyors had been appointed on the persistent demand of the claimant/appellant and the premium taken thereafter was only to make good the deficiency in the premium that had been paid for the policy for the period of eight months. It is, therefore, apparent that as on the date of the flood, there was no insurance policy in existence or any commitment on behalf of the respondent to make the payment under the policy. Therefore, even accepting the case of the appellant at its very best that the period of limitation would be 3 years under Section 44 of the Limitation Act, the complaint would, even then, be beyond time, having been filed in April 1994. [Para 5] [1018-G-H; 1019-A-D] 2. As regards the issue of clause 6 (ii) of the insurance policy vis-a-vis s.28 of the Contract Act, 1872, the National Commission had relied upon the Sujir Nayak’s case to hold that the complaint could not be entertained as being time barred. In Sujir Nayak’s case, while dealing with an identical situation where a contract contained a provision prescribing a period of limitation shorter than that prescribed by the Limitation Act, it was held that the contractual provision was not hit by s.28 as the right itself had been extinguished. The plea of the appellant that in view of the Food Corporation of India’s case, the Sujir Nayak’s case was liable for reconsideration has no merit since in Sujir Nayak’s case, Food Corporation of India’s case was specifically considered. [Paras 6, 8 and 9] [1019-D; 1021-B-D] National Insurance Co. Ltd. vs. Sujir Ganesh Nayak & Co. & Anr. (1997) 4 SCC 366; Food Corporation of India vs. New India Assurance Co. Ltd. & Ors. (1994) 3 SCC 324; Vulcan Insurance Co. Ltd. vs. Maharaj Singh & Anr. (1976) 1 SCC 943 and Muni Lal vs. Oriental Fire & General Insurance Co. Ltd. & Anr. (1966) 1 SCC 90, referred to. Case Law Reference: (1997) 4 SCC 366 referred to Para 3 (1994) 3 SCC 324 referred to Para 3 (1976) 1 SCC 943 referred to Para 3 (1966) 1 SCC 90 referred to Para 3 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6347 of 2000. From the final Judgment and Order dated 16.8.2000 of the National Consumer Disputes Redressal Commission, New Delhi in Original Petition No. 95 of 1994. Naresh K. Sharma for the Appellant. K.L. Nandwani and Debasis Misra for the Respondent. =, , , 2009(1 )SCALE216 , 2008(13 )JT66

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. 6347 OF 2000 H.P. State Forest Company Ltd. ……..Appellant Vs. M/s. United India Insurance Co. Ltd. …….Respondent JUDGMENT HARJIT SINGH BEDI,J. 1. The facts leading to this appeal are as under: 2. In October 1987, a meeting was convened by the Managing … Continue reading

Motor Vehicles Act, 1988 – ss. 147 and 149 – Motor accident – Compensation – Liability of insurer – Insurance policy taken by the owner of the vehicle covering six passengers including the driver – Vehicle while driven by father of the owner, met with an accident – Passengers in excess of the number covered by the insurance policy, travelling in the vehicle at the time of accident – Death/injury to the passengers – Claim petitions – Liability of the insurer – Held: Is confined to the number of persons covered by the insurance policy only and liability to pay the other passengers is that of the owner of the vehicle – Persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could recover it from the insured owner of the vehicle – There can be no pick and choose method to identify the five passengers, excluding the driver, in respect of whom compensation would be payable by the Insurance Company – In the interest of justice, Insurance Company directed to deposit the total amount of compensation awarded to the claimants which would be disbursed to the claimants – Insurance Company would be entitled to recover the amounts paid by it, in excess of its liability, from the owner of the vehicle, by putting the decree into execution. Respondent No. 5-owner of the vehicle obtained an insurance policy insuring his jeep with a sitting capacity of six persons including the driver, for a certain period. During the said period, the father of respondent No. 5, drove the insured vehicle carrying fifteen passengers. The vehicle fell into the ditch resulting in the death of the respondent’s father and the death of the majority of the passengers while causing serious injuries to the remaining passengers. The legal representatives of the deceased filed a claim petition. The Tribunal awarded compensation in favour of the claimants holding that carrying a larger number of passengers than was permitted in terms of the Insurance policy, did not amount to breach of the terms and conditions of the Policy and the Insurance Company would still be liable since the vehicle was legally insured. The High Court upheld the order passed by the Tribunal, but enhanced the amount of compensation. Therefore, the appellants filed the instant appeals. =Disposing of the appeals, the Court HELD: 1.1 In order to fix the liability of the insurer, the provisions of Section 147 have to be read with Section 149 of the Motor Vehicles Act, 1988 which deals with the duty of the insurer to satisfy judgments and awards against persons insured in respect of third party risks. The third party risk in the instant case involves purported breach of the conditions contained in the insurance agreement executed by and between the insurer and the insured. [Paras 20 and 22] [1041-E-F; 1040-F] 1.2. The liability of the insurer is confined to the number of persons covered by the insurance policy and not beyond the same. In the instant case, since the insurance policy of the owner of the vehicle covered six occupants of the vehicle in question, including the driver, the liability of the insurer would be confined to six persons only, notwithstanding the larger number of persons carried in the vehicle. Such excess number of persons would have to be treated as third parties, but since no premium had been paid in the policy for them, the insurer would not be liable to make payment of the compensation amount as far as they are concerned. However, the liability of the Insurance Company to make payment even in respect of persons not covered by the insurance policy continues under the provisions of sub-section (1) of Section 149 of the Act, as it would be entitled to recover the same if it could prove that one of the conditions of the policy had been breached by the owner of the vehicle. In the instant case, any of the persons travelling in the vehicle in excess of the permitted number of six passengers, though entitled to be compensated by the owner of the vehicle, would still be entitled to receive the compensation amount from the insurer, who could then recover it from the insured owner of the vehicle. [Para 24] [1042-D-G] 1.3. In the instant case, the insurance policy taken out by the owner of the vehicle was in respect of six passengers, including the driver, travelling in the vehicle. The liability of the Insurance Company to pay compensation was limited to six persons travelling inside the vehicle only the liability for payment of the other passengers in excess of six passengers would be that of the owner of the vehicle who would be required to compensate the injured or the family of the deceased to the extent of compensation awarded by the Tribunal. [Paras 25 and 26] [1042-H; 1043-A-B] 1.4. The number of persons to be compensated being in excess of the number of persons who could validly be carried in the vehicle, the question which arises is one of apportionment of the amounts to be paid. Since there can be no pick and choose method to identify the five passengers, excluding the driver, in respect of whom compensation would be payable by the Insurance Company, to meet the ends of justice the procedure adopted in *Baljit Kaur’s case is applied. The Insurance Company is directed to deposit with the Tribunal, the total amount of compensation awarded to all the claimants within the stipulated period and the amounts so deposited be disbursed to the claimants in respect to their claims. The Insurance Company would be entitled to recover the amounts paid by it, in excess of its liability, from the owner of the vehicle, by putting the decree into execution. For the said purpose, the total amount of the six Awards which are the highest would be construed as the liability of the Insurance Company. After deducting the said amount from the total amount of all the Awards deposited in terms of this order, the Insurance Company would be entitled to recover the balance amount from the owner of the vehicle as if it is an amount decreed by the Tribunal in favour of the Insurance Company. The Insurance Company would not be required to file a separate suit in this regard in order to recover the amounts paid in excess of its liability from the owner of the vehicle. [Paras 26 and 27] [1043-D-H; 1044-A-C] *National Insurance Co. Ltd. vs. Baljit Kaur (2004) 2 SCC 1 – relied on. National Insurance Co. Ltd. vs. Anjana Shyam and Ors. (2007) 7 SCC 445; National Insurance Co. Ltd. vs. Challa Bharathamma and Ors. 2004 AIR SCW 5301; New India Assurance Co. Ltd. vs. Satpal Singh and Ors. (2000) 1 SCC 237; New India Assurance Co. Ltd. vs. Asha Rani and Ors. (2003) 2 SCC 223; National Insurance Company Ltd. vs. Nicolletta Rohtagi (2002) 7 SCC 456; Mallawwa and Ors. vs. Oriental Insurance Co. Ltd. and Ors. (1999) 1 SCC 403; National Insurance Co. Ltd. vs. Swaran Singh (2004) 3 SCC 297 – referred to. Case Law Reference: (2007) 7 SCC 445 Referred to Para 11 2004 AIR SCW 5301 Referred to Para 12 (2003) 2 SCC 223 Referred to Para 12, 16, 17 (2002) 7 SCC 456 Referred to Para 12 (2000) 1 SCC 237 Referred to Para 12, 14, 16, 17 (1999) 1 SCC 403 Referred to Para 16, 17 (2004) 3 SCC 297 Referred to Para 18 (2004) 2 SCC 1 Relied on Para 26 CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1928 of 2011. From the Judgment & Order dated 25.09.2007 of the High Court of Uttarkhand at Nainital, in A.O. No. 311 of 2006. With C.A. Nos. 1929, 1930, 1931, 1932, 1933, 1934 & 1935 of 2011. A.K. De, Keshab Upadhyay, Debasis Misra for the Appellant.

1 REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO.1928 OF 2011 (Arising out of SLP(C)No.24188 of 2008) United India Insurance Co. Ltd. … Appellants Vs. ?K.M. Poonam & Ors. … Respondents WITH CIVIL APPEAL NOS. 1929, 1930, 1931 OF 2011 (@ SLP(C)NOS.24212, 24210, 24211) CIVIL APPEAL NOS. 1932, 1933, 1934 … Continue reading

motor accident case – contributory negligence -while driving the motor vehicle on the fateful day, met with an accident not because of the fault of the owner of the vehicle or because of the fault of the other vehicle, but because of the oil spill on the road. Therefore, the negligence can be attributable only on the person who was driving the vehicle and hence, is not entitled to compensation under the Insurance Policy. Therefore, the High Court was justified in invoking the beneficial legislation and in directing the Insurance Company to pay limited amount by way of compensation to the injured person of an accident arising out of the use of a motor cycle on the basis of “no fault liability,” since the accident has arisen 3

REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO..7823 OF 2011 (Arising out of SLP (C) No. 6617 of 2011) A. Sridhar ………….. Appellant versus United India Insurance Co. Ltd. & Anr. …………..Respondents J U D G M E N T H.L. DATTU, J. 1. Leave granted. 2. This appeal is … Continue reading

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