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The repudiation of insurance policy by insurance company is not valid: Supreme Court.

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Case title: Bajaj Allianz General Insurance Co.Ltd vs Mukul Aggarwal & Ors.

Case no.: Civil Appeal No.1544 of 2023

Decided on: 20.11.2023

Quorum: Hon’ble Justice Abhay S. Oka, Hon’ble Justice Rajesh Bindal

 

FACTS OF THE CASE:

An accident caused irreparable damage to Mukul Aggarwal’s (Respondent’s) BMW 3 Series 320D. His insurance claim with Bajaj General Insurance (Bajaj) was denied due to a delay in submitting the claim, a failure to respond to insurer letters, discrepancies in accident descriptions, and the discovery of bloodstains in the vehicle. Aggarwal filed a complaint with the SCDRC, which ruled in his favour and required Bajaj and BMW to indemnify him for the car’s replacement under BMW Secure Advance. The NCDRC upheld the decision, dismissing appeals by Bajaj and BMW. BMW and Bajaj filed Civil Appeals with the Supreme Court, challenging the NCDRC’s decision.

LEGAL PROVISIONS:

According to sub-clause (i) of Clause (d) of Subsection (1) of Section 2 of the consumer protection Act, 1986, any user of the goods other than the person who purchases the goods is also a consumer under the Act.

The Commissions found that the insurer and the dealer were conducting business from their offices in Delhi, citing clause (b) of sub-section (2) of Section 17 of the Consumer Protection Act, 1986 . The National Commission observed that the State Commission, by hearing the complaint, granted permission to file it.

APPELLANTS CONTENTION:

BMW’s counsel argued that the owner had no cause of action to file a complaint against BMW. The reason for this is that the insurer repudiated the policy. BMW was not liable unless the insurer was at fault. He claimed that the claim had not been settled under the insurer’s policy. He went on to say that neither the State Commission nor the National Commission found any flaws in BMW’s service.

The insurer’s submission is that the fact remains that the insured did not immediately notify the insurer of the accident. He pointed out that the owner suppressed material facts about the nature of the accident. He stated in the Forensic Investigation Report that blood stains were discovered on the car’s dashboard and driver’s seat, as well as beer bottles in the vehicle. As a result, he argued that there was every reason to reject the policy on the grounds stated in the letter of repudiation.

RESPONDENTS CONTENTION:

The owner’s counsel argued that because the State and National Commissions made concurrent findings of fact, this Court should not interfere with them. The learned counsel supported the State Commission’s reasons for concluding that the repudiation of the policy was illegal. They supported the challenged decisions.

COURT ANALYSIS AND JUDGEMENT:

The Supreme Court found fault with the Insurer’s and BMW’s services. The Court emphasised the importance of clear evidence in determining liabilities based on the insurance and BMW Secure policy terms. On the issue of policy repudiation by the insurance company, the Court stated that the primary basis for repudiation was a significant delay in notifying the insurer of the accident. The Bench did, however, note that there is evidence that the accident was reported to police. The insurer neither disputed the accident nor claimed that it was caused by the driver’s reckless and negligent driving. Furthermore, the insurer did not claim that the driver was prosecuted for such behaviour. As a result, the Court ruled that the insurer’s repudiation of the insurance policy was invalid.

The Court evaluated the compensation, assigning a specific amount to the insurer and providing a reasonable estimate for BMW. The Supreme Court granted the appeal in part, setting aside the operative portion of the State Commission’s Order.

 

 

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Written by – Surya Venkata Sujith

 

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The Gujarat High Court Division Bench found that a written complaint must be filed within 45 days, and in the absence of such a complaint, the seized property should be released without insisting on a bank guarantee.

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Case Title

MANSUKH ALIAS RAVJI GORASIYA V. THE STATE OF GUJARAT (C/LPA/717/2020)

CORAM: HONOURABLE THE CHIEF JUSTICE, MR. JUSTICE VIKRAM NATH and HONOURABLE MR. JUSTICE ASHUTOSH J. SHASTRI

Introduction

The case results from various appeals to the HC; noting the similarity of the same, the instances were clubbed, and a single judgement was passed.  The requests involve releasing vehicles seized under the Gujarat Mineral (Prevention of Illegal Mining, Transportation and Storage) Rules, 2017. The appeals challenge the condition imposed by the learned Single Judge of furnishing a continuing bank guarantee for releasing the vehicles.

Facts of the Case

In the first appeal, the vehicle owner sought the release of a Tata Hitachi Machine seized on 16.10.2019. The petitioner argued that the vehicle was used for road levelling, not illegal mining. Despite a reply stating this, the vehicle was not released, leading to the filing of a petition for the quashing of the notice and release of the vehicle.

In the second appeal, a dumper bearing No.GJ-12-V-6037 was seized on 18.5.2020 for carrying minor minerals without a royalty pass. The petitioner claimed that the vehicle was illegally detained and offered to pay the penalty and provide a bank guarantee. However, when no response was received, a petition was filed for the release of the vehicle.

In both cases, the learned Single Judge granted interim orders allowing the release of the vehicles upon furnishing a continuing bank guarantee and fulfilling other requirements. The appellants argued that the condition of a bank guarantee conflicted with a previous judgment stating that if no prosecution is launched within 45 days of seizure, the vehicle must be released unconditionally.

Judgement

During the appeal, the appellants’ counsels argued that the learned Single Judge should have followed the earlier judgment and that the Authorized Officer must file a complaint within 45 days, failing which the vehicle should be released unconditionally. They contended that any other interpretation would give the Authorized Officer excessive power and violate the constitutional right to equality.

The Advocate General representing the state respondents defended the orders of the learned Single Judge and referred to provisions in the 1957 Act and the 2017 Rules. However, they could not provide any provision specifying a time limit for filing a complaint.

Upon considering the submissions, the Division Bench found that the previous judgment clearly stated that a written complaint must be filed within 45 days. In the absence of such a complaint, the seized property should be released without insisting on a bank guarantee.Top of Form

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Written by- Aadit Shah

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Karnataka High Court: Criminal Court’s Guilty Verdict in Rash and Negligent Driving Case Prevails Over Motor Accident Tribunal’s Contrary Finding on Driver’s Identity

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Karnataka High Court

DILSHAD V. ATHAULLA KHAN & ORS.

MISCELLANEOUS FIRST APPEAL NO. 5640 OF 2018 

(MV-D) 

C/W MISCELLANEOUS FIRST APPEAL NO. 333 OF 2018 

(MV-D), 

MISCELLANEOUS FIRST APPEAL NO. 334 OF 2018 (MV-I)

Bench- HON’BLE MR JUSTICE N S SANJAY GOWDA

Decided On 06-04-2023

Facts of the case-

The claimant alleged that a car driven by Athaulla Khan, bearing registration No.KA-17/N-5130, collided with the deceased Shukru Sab and his granddaughter Vasila while they were standing near Bhadri shop. This collision resulted in severe injuries to Shukru Sab, leading to his unfortunate demise, and Vasila also sustained injuries. Consequently, the claimants sought compensation for the incident.

In this case, the Insurance Company was the sole party opposing the claim, while the driver and owner of the car did not contest the proceedings. The Insurance Company denied all the claims made in the petition, asserting that there was an unexplained delay in lodging the complaint. Furthermore, they contended that Athaulla Khan was not involved in the accident, as the medical records identified the driver as Akthar, son of Ameer Jan Khan. The Insurance Company argued that since Akthar, who lacked a valid driving license, was implicated as the driver instead of Athaulla Khan, they should not be held liable.

Additionally, the Insurance Company alleged collusion between the police and the claimant, asserting that the charge sheet filed against Athaulla Khan had no legal consequence.

The Tribunal, considering the discrepancies in the driver’s name recorded in the medical documents, accepted the contentions put forth by the Insurance Company. Consequently, the Insurer was absolved of any liability in this matter.

Judgement

The Court held that the findings of the Motor Accidents Claim Tribunal, which identified a different driver for the offending vehicle, cannot be accepted once a competent criminal court has already convicted the driver for charges of rash and negligent driving resulting in death. The Court noted that the Insurer failed to provide any evidence supporting the claim that the hospitalized individual was different from the person named as the first respondent, Athaulla Khan. Merely relying on entries in medical records does not establish the claim of a different driver.

Considering that the police conducted an investigation, charged Athaulla Khan, and that the Criminal Court, after trial, convicted him for driving the car recklessly and negligently, the Court concluded that Athaulla Khan was indeed the driver at the time of the accident. Based on the conviction handed down by the Criminal Court, it was deemed established that Athaulla Khan’s actions caused the death of Shukru Sab and injuries to his granddaughter, Vasila.

Consequently, the Court set aside the Tribunal’s finding that the driver was someone other than Athaulla Khan, and held the Insurer liable to pay compensation for the death of Shukru Sab and for Vasila’s injuries. The Court modified the awarded compensation from Rs 4,43,000 to Rs 9,48,200. The Insurance Company was directed to deposit the awarded compensation amount within a period of two months.

JUDGEMENT REVIEWED BY ABHAY SHUKLA

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