Legal Reference Library

In Reliance General Insurance Co. Ltd. Vs. Jivabhai Maldebhai Godhaniya, the NCDRC held that considering the distinct requirements laid down in The Motor Vehicles Act, 1988 and The Central Motor Vehicles Rules, 1989 about the grant of licence for commercial vehicles, it is clear that the holder of the LMV licence had no authority to drive the commercial vehicle without proper endorsement from the concerned transport authority. The detailed analysis of the legal provisions, made in para 10 above about the basic requirements for the grant of licence for transport/non-transport vehicles, make it clear that for enabling a person to drive a commercial vehicle, the licencing authority has to ensure that he fulfils the requisite conditions of age, educational qualifications, medical certificate etc. Unless a person satisfies the licencing authority on that score and obtains proper authorisation for driving a commercial vehicle, he cannot be stated to be in possession of a valid and effect...

In a significant judgment Supreme Court in NATIONAL INSURANCE CO. LTD. VS. HINDUSTAN SAFETY GLASS WORKS LTD. held that provision of limitation in the Consumer Protection Act cannot be strictly construed to disadvantage a consumer. The Bench comprising Justices Madan B Lokur and PC Pant held that in a dispute concerning a consumer, it is necessary for the courts to take a pragmatic view of the rights of the consumer principally since it is the consumer who is placed at a disadvantage vis-à-vis the supplier of services or goods.

In Kanchan Alok v. CPIO, National Insurance Company Limited, the Commission observed that Issues raised in RTI application related to rules/guidelines primarily relating to transfer related papers to insurer post sanction of claim in vehicle theft case which ought to be suo motu disclosed as per Section 4 of RTI Act, 2005. Though Respondent submitted that all such information has been disseminated, it is essential that vital and critical information pertaining to rules for insurance claims should be widely disseminated and displayed on the website for the benefit of all concerned.

The Supreme Court, in M/s. Purohit and Company vs. Khatoonbee, has observed that though there is no limitation period to raise a claim for compensation before a Motor Accident Claims Tribunal, it should be done within a reasonable time. A three-judge bench headed by Chief Justice of India JS Khehar was considering an appeal against a high court order which had upheld the justiciability of a claim petition filed 28 years after the accident took place on the ground that no period of limitation had been provided for raising a claim for compensation under the Motor Vehicles Act, 1988. The bench agreed with the contention advanced on behalf of the appellants, that even though there may no longer be a defined period of limitation for approaching the Motor Accident Claims Tribunal to raise a claim for compensation (under the provisions of the Motor Vehicles Act, 1988), yet a claimant must approach a court for raising such a claim within a reasonable time. The only reason stated in the c...

In Rajesh Kumar V. National Insurance Company Limited and Ors, revision petition has been filed before NCDRC against the impugned order passed by Haryana State Consumer Disputes Redressal Commission in Appeal No. 1192/2014, vide which, order passed by District Forum Kurukshetra, partly allowing complaint No. 24/2013, filed by present Petitioner, was set aside. State Commission held that there was fundamental breach of terms and conditions of policy on part of complainant, as vehicle was being used as a taxi. Perusal of reply filed by OP Insurance Company before District Forum and orders passed by State Commission as well as District Forum reveals that after alleged incident, an FIR was registered by father of the Complainant before the local police, in which it was stated that three persons came to Complainant, when he was standing at the taxi stand. He settled a fare of Rs. 700/- with them for taking them to Ambala Cantt. However, when they were on their way, occupants of the ca...

The Karnataka High Court in Hussain vs. Imtiyan Khan has held that a legal representative of a claimant cannot challenge the award and she does not inherit the right to prosecute the appeal after death of the claimant. The legal representative of the claimant had contended that when insurance company files an appeal challenging the award of the tribunal, if a legal representative of the injured can be permitted to come on record on the death of injured during the pendency of the appeal, the same is to be permitted when the injured files an appeal and dies subsequently. Justice Sreenivas Harish Kumar said: “If he had not died, he could have prosecuted the appeal seeking enhancement of compensation. The moment he died, his wife is only entitled to recover the compensation granted by the tribunal. Right to prosecute an appeal being a legal representative is not heritable. If it is possible to make out the cause of death as due to personal injuries owing to accident, the wife gets a ri...

In Sandeep Khanuja vs Atul Dande & Anr, the Hon'ble Supreme Court while increasing the compensation of the accident victim held that We may observe at the outset that it is now a settled principle, repeatedly stated and restated time and again by this Court, that in awarding compensation the multiplier method is logically sound and legally well established. This method, known as 'principle of multiplier', has been evolved to quantify the loss of income as a result of death or permanent disability suffered in an accident. Recognition to this principle was given for the first time in the year 1966 in the case of Municipal Corporation of Delhi v. Subhagwanti & Ors.[1] What requires to be assessed by the Tribunal is the effect of the permanent disability on the earning capacity of the injured; and after assessing the loss of earning capacity in terms of a percentage of the income, it has to be quantified in terms of money, to arrive at the future loss of earnings (by ...

In NATIONAL INSURANCE CO. LTD vs M/S.PATTU AGENCIES, the appeal was preferred before  Hon'ble Kerala High Court against order of the trial court with the primary object of the insurer being that the change of address of the insured property had not been intimated to the insurer. The Hon'ble High Court rejecting the ground for disallowing the claim held "It is true that a policy can be avoided for misrepresentation or non-disclosure. However, the misrepresentation or non-disclosure should be a material one and it must have induced the Insurance Company to make the policy in favour of the insured. The non-disclosure or misrepresentation should have induced the insurer to enter into the contract. There must be a specific case that there was inducement to issue a policy relying on the facts disclosed by the insurer and that there was non-disclosure or misrepresentation. The test is whether the insurer would have made a different decision had the facts been correctly disclos...

National Consumer Disputes Redressal Commission Jaiprakash Associates Ltd. V. ICICI Lombard General Insurance Co. Ltd. 16.12.2016 Consumer Insurance coverage cannot be available for a vague or indefinite period Government of Andhra Pradesh awarded work of Investigation, Design and Execution of Tunnel -1 & Tunnel - 2, including Head Regulator at entrance of portal of Tunnel - 1 of Srisailam Left Bank Canal Tunnel Scheme of AMR project from NSRSP Reservoir, to Complainant Company. Case of Complainant is that project site and surrounding areas having been hit by heavy and incessant rains, it got completely sub-merged with water causing substantial damage to its property including Tunnel Boring Machines, (TBMs) which were under erection at that time on inlet of tunnel. Intimation of loss having been given to insurer, Cunningham Lindsey International Pvt. Ltd. were appointed as surveyors for assessing loss. Surveyors however informed Complainant that, existing CAR policy did n...

In The New India Assurance Co.Ltd. v. Hussain Babulal Shaikh, Petitioner-New India Assurance Company Limited filed instant petition challenging order passed by learned member of Maharashtra Accident Claims Tribunal, whereby an application of Respondent No.1 for issuance of warrant of attachment against Petitioner in execution of an award, for not depositing part of award amount, on ground that, same has been deducted as “tax deducted at source” (TDS), stands allowed. Issue which falls for consideration of the Court is 'whether the Petitioner would be justified in deducting tax at source (TDS) in respect of interest payment made under the award of the Tribunal. As per Section 194A of Income Tax Act, 1961, when any person not being an individual or Hindu undivided family who becomes responsible for paying to a resident any income by way of interest other than income by way of interest on securities, shall at time of credit of such income to the account of the payee or at the time o...

In Sheela O.K. Vs. New India Insurance Company, the Hon'ble Kerala High Court decided that When an insurer is impleaded as a party-respondent to the claim petition, as contrasted from merely being a noticee under Section 149(2) of the Act, its rights are significantly different. If the insurer is only a noticee, it can only raise such of those grounds as are permissible in law under Section 149(2). But if he is a party-respondent, it can raise, not only those grounds which are available under Section 149(2), but also all other grounds that are available to a person against whom a claim is made. If the insurer is already a respondent, having been impleaded as a party-respondent, it need not seek the permission of the Tribunal under Section 170 of the Act to raise grounds other than those mentioned in Section 149(2) of the Act.

National Consumer Disputes Redressal Commission Sonell Clocks and Gifts Ltd. v. The New India Assurance Co. Ltd. MANU/CF/0510/2016 25.10.2016 Consumer Insured is required to intimate loss or damage to insurer expeditiously and within a reasonable time As complaint was dismissed by Commission, review petitioner/complainant preferred an appeal before Supreme Court. In terms of liberty granted by Supreme Court, present review petition has been filed by complainant. In view of specific direction of Supreme Court, scope of review petition is restricted to issue as to whether Respondent insurer had waived the condition related to delay in intimation, by appointing a surveyor. Clause-6 of Insurance Policy, required insured to forthwith give notice to insurer on happening of any loss or damage. It is an admitted position that instead of rejecting claim out rightly on account of delay in intimating loss to it, insurer appointed a surveyor to visit premises of complainant/review pe...

Government is liable to compensate for death or injury occurring to a vehicle owner during an accident as road tax is levied by them and as coverage is not available to the owner in the insurance provided as per law, says the Kerala High Court. Government can either pay such compensation or assign the burden to insurance companies through appropriate change in legislation, the court said. A division bench comprising justices CT Ravikumar and KP Jyothindranath asked the government to give due attention to the matter after considering an appeal (MACA No. 2102/2013) filed by the wife, children, and mother of Biju of Kottaram Nagar in Kollam who died in a motorcycle accident at around 5.30pm on March 21, 2010. Biju was riding pillion on the motorcycle owned by him and one Gireesh Kumar was riding the bike when it capsized. Biju had obtained a full insurance from National Insurance Co. Ltd but the company declined to grant compensation stating they are liable to pay only a third party and...

The Supreme Court in Sandhya Rani Debbarma & Ors. Vs. The National Insurance Company Ltd. & Anr, has observed that determining the compensation under different heads such as loss of estate, funeral expenses, loss of consortium etc. is crucial while computing award of compensation due to dependants of the deceased in motor accidents. In the instant case, the husband of the appellant Sadhya Rani died in an accident in Baramur in 2003, following which she filed a suit before the Agartala Motor Accident Claims Tribunal seeking a compensation of Rs 33.45 lakh. The Tribunal in 2005, by way of judgment, said Rs 32,52,700 be given to the deceased’s family. The National Insurance Company challenged the Tribunal verdict in Gauhati High Court, which modified the award and reduced it to Rs 20.40 lakh in 2006. An apex court Bench comprising Justice V Gopala Gowda and Justice Adarsh Kumar Goel said it disagreed with the view adopted by the Gauhati High Court, which had modified the Tribunal ...

The Supreme Court in M/s. INDUSTRIAL PROMOTION & INVESTMENT CORPORATION OF ORISSA LTD. VS. NEW INDIA ASSURANCE COMPANY LTD. & ANR. has reiterated that Contract of Insurance should be construed strictly and it is only when there is any ambiguity or doubt the clause in the Policy, it should be interpreted in favour of the insured. In the instant case, the insurance policy provided cover against loss or damage by Burglary or House breaking i.e. (theft following an actual, forcible and violent entry of and/or exit from the premises). The Insurance Company rejected the claim of a company, stating that there is no forcible and violent entry. The insured company had preferred a complaint before MRTP commission, which rejected it. The company preferred appeal. The Apex Court bench comprising of Justices Anil R. Dave and L. Nageswara Rao upholding the order of MRTP commission observed that as per the Insurance contract forcible entry is required for a claim to be allowed under the pol...

National Consumer Disputes Redressal Commission:  An insurance company can reject an insurance claim of a stolen vehicle on the ground that the vehicle was not duly registered, observed NCDRC while allowing a revision petition of Oriental Insurance Co. Ltd. vide which the Company challenged the order of Himachal Pradesh State Consumer Commission granting compensation to vehicle owner. This order of the National Consumer Disputes Redressal Commission has its origin in the theft of a vehicle owned by the complainant, and the rejection of his claim by the insurance company on the ground that the vehicle was not registered at the time of theft. The vehicle, Mahindra Bolero SLX, purchased on June 14, 2008 for Rs 5,94,000  had been insured covering the period from 19.06.2008 to 18.07.2009. Six months later, on December 27, 2008, the vehicle unfortunately was stolen, giving rise to a claim. The insurance company however repudiated the claim on the ground that the vehicle had no va...

M/s. INDUSTRIAL PROMOTION & INVESTMENT CORPORATION OF ORISSA LTD. Versus NEW INDIA ASSURANCE COMPANY LTD. & ANR. The Supreme Court has ruled that a person or an entity can't seek compensation on insured goods if theft happened without violence. Citing a 2004 SC judgment, Justice Rao said, "In the absence of violence or force, the insured cannot claim indemnification against the insurance company. The terms of the policy have to be construed as it is and we cannot add or subtract something. Howsoever liberally we may construe the policy, we cannot take liberalism to the extent of substituting the words which are not intended. "...in common parlance, the term 'burglary' would mean theft but it has to be preceded with force or violence. If the element of force or violence is not present, then the insured cannot claim compensation."  The ruling came in case where an Odisha PSU had claimed insurance amount of Rs 34.40 lakh in addition to ...

The district consumer court has ruled that an insurance company cannot repudiate claim for damages if the driver of the insured vehicle has, in any way, not contributed to the accident involving the vehicle. The consumer court imposed a cost of Rs 5,000 on New India Assurance Company and directed it to reimburse a city-based lawyer Rs 40,897 as car repair charges after her vehicle was involved in an accident on Lal Bahadur Shastri road on March 7, 2013. A speeding tempo had dashed against the car, resulting in the driver momentarily losing control over the steering wheel and crashing into a road divider. Manasi Joshi, the complainant, had filed a Rs40,897 claim for damages suffered by her car. The insurance company rejected Joshi's claim on May 5, 2013, arguing that the car was being driven by her husband who did not posses a valid driver's license. Later, she filed a consumer complaint seeking the court's directions to the insurance company for reimbursement of her insu...

Uttarakhand High Court has recently held that a person, who met with accident, in any manner, being an employee, then he may claim compensation under either Motor Vehicles Act or Workmen’s Compensation Act but he cannot be at liberty to claim such compensation under both the Acts. Justice Servesh Kumar Gupta has dismissed an Appeal filed by Dalbir Lal who already got the compensation under Motor Accidents Claims who approached the Court seeking further compensation under the Workmen Compensation Act for the reason that he met an accident when he had already left his Office and was in the way to reach his home. Dismissing the Appeal the Court held that Section 167 of the Motor Vehicles Act contemplates in so many words regarding claims for compensation of a person, who met with accident, in any manner, being an employee, then he may claim compensation under either Motor Vehicles Act or Workmen’s Compensation Act but he cannot be at liberty to claim such compensation under both the A...

The Madras High Court has said compensation awarded by the Motor Accident Claims Tribunal or the interest accruing therein cannot be subjected to tax deducted at source (TDS). A civil revision plea was filed by the Managing Director, Tamil Nadu State Transport Corporation (Salem) Limited, Dharmapuri, against an order passed by Additional District Judge, Fast Track Court, directing the corporation to deposit the amount deducted as TDS to the MACT claimant. The Hon'ble court said that compensation awarded by the Motor Accident Claims Tribunal, and interest accruing thereon, is to ameliorate the sufferings of the victims and does not have the character of "income". If there is a conflict between a social welfare legislation and a taxation legislation, the social welfare legislation will prevail since it subserves larger public interest. Article referred: http://www.financialexpress.com/article/personal-finance/accident-compensation-cannot-be-subjected-to-tds-madras-hi...