BHAGU RAM V/S NATIONAL INSURANCE COMPANY LTD., 2016

Bhagu Ram v. national Insurance Company Limited, 2016 SCC Online NCDRC 2064: MANU/CF/0339/2016

INTRODUCTION-

The Case ‘Bhagu Ram v. National Insurance Company Limited’, is a landmark case about how breach of insurance policy’s terms result in failure to get insurance claim settled. 

The central idea of this case mainly revolves around the point that to get your rights established, you have to fulfil duties on your part. Like when the petitioner wasn’t able to present the valid fitness check of the impugned vehicle on the date of accident, he now can’t ask for getting reimbursed for the expenses incurred by him because of the accident.

Present case also highlights that the revisional powers of the National Commission can only be invoked when there is grave jurisdictional or legal error on part of the State Commission and not otherwise. This judgement surely influences the upcoming similar proceedings and provides for certain legal principles.

All the material points about this are discussed herein under.

FACTS OF THE CASE-

• A turbo truck (RJ 21 GA 2617) was purchased by the petitioner and was insured (period of insurance- 06.07.2011 to 05.07.2012) from the respondent.
• The aforesaid truck met with an accident (02.09.2011) on NH 15 and a total expenditure of Rs. 13,50,819/- was incurred for reparation purpose.
• Petitioner filed to claim those expenses but respondent didn’t settle the same.
• District Consumer Disputes Redressal Forum, Nagaur (04.11.2015) – directed the respondent to pay Rs. 7,57,059/- along with 9% interest per annum from date of filing claim petition (04.11.2013) till recovery, with Rs. 5000/- as litigation expenses and Rs. 5000/- as compensation for mental agony.
• Aggrieved by the above order, the respondent appealed to the State Commission.
• State Commission (05.05.2016) – set aside the order of District Forum as it seems arbitrary and stated that on the date of the accident, the vehicle had no fitness certificate. Petitioner mentioned that receipt of Rs. 500/- was issued from the DTO but no valid certificate was given and an accident occurred after 2 days of it.
• A case Aeroflot Soviet Airlines vs United India Insurance Company Ltd. was cited in this regard and held that as the complainant had no fitness certificate, he shouldn’t have bought a vehicle on the road and because of violation can’t get policy benefit for the same. 
• So, this revision petition is presented before the bench.

ISSUES RAISED-

1. Whether the petitioner is entitled to get reimbursed for expenses incurred.
2. Is a fitness certificate of a vehicle necessary for claiming insurance money. 

CONTENTIONS OF THE PETITIONER-

1. That the vehicle didn’t have the valid certification of fitness on the date of accident (02.09.2011), it expired about a month and a half before the incident. But the petitioner had already applied for the same on 30.08.2011.

CONTENTIONS OF THE RESPONDENT-

1. The surveyor of the insurance company assessed the damage to be of Rs. 7,57,059/- in its report.
2. That the vehicle of the petitioner had no fitness certificate i.e., it wasn’t fit and effective to be on roads. It is against the policy; hence the insurance amount wasn’t payable.

JUDGEMENT-

This commission, after considering all the facts and circumstances, came to the decision that there’s no error in the order of the State Commission. 

They stated that, as per Sections 39 and 56 of the Motor Vehicles Act, no vehicle could be driven on public places when it has no valid fitness and as the aforesaid vehicle violated this provision, it is not entitled to be compensated for the damages and expenses.

Also, landmark SC judgement in case of Mrs. Rubi (Chandra) Dutta vs M/s United India Insurance Co. Ltd. states that the National Commission can exercise its revisional powers only when there is some prima facie jurisdictional error or miscarriage of justice in the impugned judgement or order. In such a case, the National Commission’s revisional powers can be invoked and it can pass a different order by interpreting the rationale behind it. 

So, in the present set of facts and situation, this Commission don’t find any such legal error in the impugned order and hence there’s no necessity of interference in the order of State Commission.

This revision petition stands dismissed and the order of State Commission is duly upheld. 

ANALYSIS-

1. Insurance Policy– This is a kind of agreement between the insurer and the insured where insurer promises to provide damages on happening of certain contingency with some consideration and terms and conditions to be followed by the insured. In present case, as insured (plaintiff) didn’t comply with the terms, he wasn’t entitled to claim damages from the insurer (defendant). 

2. Claim of damages-the core of the case is about claiming expenditure incurred by the plaintiff due to an accident but isn’t able to get that as it breached the clause of the policy as well as Motor Vehicles Act.

3. Fitness certificate– it is a type of verification which states that the vehicle is in the condition of being driven on roads/public places and poses to harm to society. And the plaintiff didn’t have this certification on the date of accident i.e., it was expired.

4. Jurisdiction- this implies that whether the forum or commission or court has the power to adjudicate the matters listed before it. And the case is about the revisory powers of National Commission and their procedure. 

CONCLUSION-

The present case establishes a crucial legal precedent in matters of Motor Vehicles insurance policy. It clarifies the rights and duties of both the parties and establishes that none of the party can misuse and misinterpret the terms of the agreement. If any one of them tries to do so, legal recourse is available for them.  

When the defendant refused to pay damages to plaintiff, it appealed to District Forum which accepted the demand of the latter. But the defendant again went to State commission which reversed the decision.

Being aggrieved the matter came in front of the above panel, and as stated already, the petition got dismissed and certain legal principles are regulated. 

So, in brief, this is the assurance which maintains the dignity of justice and jurisdiction. Its not always that the customer can get benefit of its vulnerable position and acquire what he doesn’t deserve. 

REFERENCES-

1. https://indiankanoon.org/
2. m.economictimes.com

This Article is written by Devanshi Goyal, student of Faculty of law, JNVU, Jodhpur; Intern at Legal Vidhiya.

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