APPEARED AT THE TIME OF ARGUMENTS For the Petitioner : Mr. K. L. Nandwani, Advocate For the Respondent NEMO PRNOUNCED ON: 29 APRIL, 2016 th -1- O R D E R PER DR. B.C. GUPTA, PRESIDING MEMBER This revision petition has been filed challenging the order dated 30.03.2010, passed by the Andhra Pradesh State Consumer Disputes Redressal Commission, Hyderabad (hereinafter referred to as the State Commission) in First Appeal No. 1413/2007, P. Ramakrishna Reddy vs. United India Insurance Corporation Ltd., vide which, while allowing the appeal, the order dated 07.09.2006, passed by the District Consumer Disputes Redressal Forum, Kadapa in Consumer Complaint No. 02/2006, was set aside and the consumer complaint was allowed.

2. The brief facts of the case are that the complainant/respondent P. Ramakrishna Reddy obtained an insurance policy for his mini lorry AP04U-4841 valid for the period from 04.10.2002 to 03.10.2003, covering own damage as well as the third party risk. The lorry was returning on

06.12.2002 after unloading Chamanthi flower baskets at Chennai, when the driver of the vehicle hit a tree near Obulavaripalli Cross Road on Kodur-Rajampet, Main Road. The vehicle was damaged in the said accident and two persons, who were owners of the goods being transported and were sitting inside the cabin, got killed and the other person received bodily injuries. It has been stated in the consumer complaint that at that time, the driver was driving the vehicle in a rash and negligent manner. A criminal case was registered under Section 337, 304A IPC against the driver of the vehicle vide CR No. 70/2002 at Obulavaripalli. The complainant also gave intimation of the accident to the Insurance Company, who appointed a surveyor to look into the matter. The vehicle was repaired by A.P. Motors, an authorized dealer for M/s. Standard Automotives Eicher at a cost of Rs. 2,27,514/-. It is stated that it took three months for getting the vehicle repaired and they spent Rs. 2 lakhs on the said repairs. Besides, they lost an income of Rs. 30,000/- for the three months, during which the vehicle was under repairs. The opposite party, Insurance Company, vide letter dated 20.06.2004, repudiated the claim on the ground that 11 persons, excluding the driver and cleaner were travelling in the vehicle at the time of accident, which was in violation of the terms and conditions of the policy. The complainant filed the consumer complaint in question, seeking direction to the opposite party for payment of a sum of Rs. 2.5 lakhs alongwith 12% interest from the date of accident till realization and sum of Rs. 30,000/- as damages and mental agony and Rs. 20,000/- for loss of income.

3. The complaint was resisted by the opposite party, Insurance Company by filing a written reply before the District Forum in which they stated that it was revealed from a report of the police investigation that 11 persons were travelling at the time of accident, excluding the driver and cleaner, although its seating capacity was only three and hence, there was violation of the terms and conditions of the insurance policy.

4. The District Forum, after taking into account the contentions raised by the parties, dismissed the consumer complaint in question. Being aggrieved against the said order, the complainant challenged the same by way of an appeal before the State Commission, which has been allowed vide impugned order of the State Commission and a direction has been given to the opposite party to pay Rs. 2 lakhs to the complainant with interest @ 9% per annum from the date of repudiation till realization together with cost of Rs. 2000/-. Being aggrieved against the said order, the opposite party, Insurance Company is before this Commission by way of the present revision petition.

5. During arguments, the learned counsel for the petitioner stated that there had been violation of the terms and conditions of the policy, because 11 passengers were travelling in the vehicle, although it was a goods-carrying vehicle and hence, there was a violation of the terms and conditions of the policy.

6. I have examined the entire material on record and given a thoughtful consideration to the arguments advanced before me.

7. The main point for consideration in the present case is that admittedly, the vehicle is a goods-carrying vehicle and its seating capacity is written as 3 in the registration book for the vehicle. It is also not denied that at the time of accident of the vehicle, it was carrying 11 passengers besides the driver and the cleaner. The complainants have, however, stated that the cause of the accident is rash and negligent driving and not the fact that there were 11 passengers in the vehicle. This issue has been examined in a recent judgment, passed by the Honble Supreme Court of India, in decided on 07.01.2016, Civil Appeal No. 49-50 of 2016, Lakhmi by a Bench headed by the Honble Chief Justice of Chand vs. Reliance General Insurance, India. In this judgment, the Honble Apex Court relied upon their earlier judgment, passed in B. , in which it was held as V. Nagaraju vs. Oriental Insurance Co. Ltd., 1996 (IV) SCC 647 under:-

It is plain from the terms of the Insurance Policy that the insured vehicle was entitled to carry 6 workmen, excluding the driver. If those 6 workmen when travelling in the vehicle, are assumed not to have increased any risk from the point of view of the Insurance Company on occurring of an accident, how could those added persons be said to have contributed to the causing of it is the poser, keeping apart the load it was not carrying. Here it is nobodys case that the driver of the insured vehicle was responsible for the accident. Merely by lifting a persons or two, or even three, by the driver or the cleaner of the vehicle, without the knowledge of owner, cannot be said to be such a fundamental breach that the owner should, in all events, be denied indemnification. The misuse of the vehicle was somewhat irregular though, but not so fundamental in nature so as to put an end to the contract, unless some factors existed which, by themselves, had gone to .

contribute to the causing of the accident (emphasis laid by this Court)

8. The Honble Apex Court has held in the said judgment, Lakhmi Chand vs. Reliance as follows:- General Insurance (supra)

18. It becomes very clear from a perusal of the above mentioned case law of this Court that the insurance company, in order to avoid liability must not only establish the defence claimed in the proceeding concerned, but also establish breach on the part of the owner/insured of the vehicle for which the burden of proof would rest with the insurance company. In the instant case, the respondent-Company has not produced any evidence on record to prove that the accident occurred on account of the overloading of passengers in the goods carrying vehicle. Further, as has been held in the case of B.V. Nagaraju (supra) that for the insurer to avoid his liability, the breach of the policy must be so fundamental in nature that it brings the contract to an end. In the instant case, it is undisputed that the accident was infact caused on account of the rash and negligent driving of the offending vehicle by its driver, against whom a criminal case vide FIR no. 66 of 2010 was registered for the offences referred to supra under the provisions of the IPC. These facts have not been taken into consideration by either the State Commission or National Commission while exercising their jurisdiction and setting aside the order of the District Forum. Therefore, the judgment and order of the National Commission dated 26.04.2013 passed in the Revision Petition No. 2032 of 2012 is liable to be set aside, as the said findings

recorded in the judgment are erroneous in law.

9. In the instant case, it has been stated in the report of V. V. Ramana, Investigator, appointed by the Insurance Company, that as per the report lodged with the police, the vehicle was being driven in a rash and negligent manner at the time of the accident. It was also true that 11 persons were travelling in the vehicle besides driver and cleaner, but following the judgment of the Honble Supreme Court in it is made Lakhmi Chand vs. Reliance General Insurance (supra), out that it is not that fundamental breach of the terms and conditions of the policy, based on which the payment of claim could be denied to the complainants. The State Commission, while passing the impugned order, also placed reliance on the judgment of the Honble Apex Court in B.V. . It is held, therefore, that there is no Nagaraju vs. Oriental Insurance Co. Ltd. (supra) illegality, irregularity or jurisdictional error in the order passed by the State Commission. This revision petition is, therefore, ordered to be dismissed and the order passed by the State Commission upheld with no order as to costs. ...................... DR. B.C. GUPTA PRESIDING MEMBER