NCDRC Asks Reliance General Insurance To Pay Full Claim in Motor Accident Case
Moneylife Digital Team 15 February 2023
While rejecting an appeal, the national consumer disputes redressal commission (NCDRC) directed Reliance General Insurance Co Ltd to pay the entire insured sum of Rs5.12 lakh to the complainant in a motor accident case. The insurer had challenged an order passed by Uttar Pradesh (UP) state consumer disputes redressal commission. 
In an order issued earlier this month, the bench of C Viswanath (presiding member) and Subhash Chandra (member) says, "The state commission was perfectly justified in dismissing the appeal. We see no reason to disagree with the concurrent findings of both the fora below. There is no infirmity or illegality in the impugned order, warranting interference under Section 21 (b) of the consumer protection act."
Maharajganj (UP)-based Alauddin Ansari bought a vehicle insurance policy from Reliance General Insurance for his Bolero. During the subsistence of the policy, on 31 January 2012, the vehicle met with an accident at a railway crossing with a moving vehicle, resulting in complete damage to the vehicle and the death of its driver Nabi Hussain. Mr Ansari informed the insurance company about the accident and presented a claim. However, the claim was not paid. He then approached the district forum, which directed Reliance General Insurance to pay the insurance claim in full and also Rs10,000 as compensation and Rs2,000 as litigation costs to Mr Ansari.
Reliance General Insurance challenged the order before the UP state commission. However, the state commission dismissed the appeal while upholding the order passed by the Maharajganj district forum.
The insurer then approached NCDRC requesting to set aside orders passed by the below fora. 
During the hearing, the counsel for Reliance General Insurance submitted that the state commission, as well as the district forum, failed to appreciate that Mr Ansari was using the vehicle to earn money by carrying passengers while it was registered and insured as a private vehicle and not as a passenger-carrying vehicle. 
"Since the vehicle was used by Mr Ansari as passenger carrying vehicle, despite registering and insuring the vehicle as a private vehicle, the claim was repudiated. The act of Mr Ansari amounted to a breach of motor vehicles act as well as violation of policy conditions. The insurance policy issued in respect of private and passenger-carrying vehicles are different and the premium charged for the latter category is higher than the former. Thus, if a vehicle registered and insured as a private vehicle is being used to earn money by carrying passengers, it would amount to a violation of the insurance policy and the insurer is entitled to repudiate the claim made under the policy by such owner," the counsel added.
The counsel for Mr Ansari submitted that Reliance General Insurance has solely relied on an affidavit alleging that it has been filed in its office. He also pointed out that the stamp paper was purchased on 18 January 2012, and the accident occurred on 31 January 2012. "The affidavit dated 26 February 2012 was signed and attested on 25 May 2012 by a notary advocate. The contents of stamp paper, signature and stamp of notary advocate were taken under the clouds and conspiracy hatched by the insurance company to eschew the liability of the payment."
"Even if the contents of the affidavit are taken as true, the content of the affidavit never depose that the vehicle was used for commercial purposes. Another contention of the insurer that 22 passengers were sitting in the vehicle is also not correct. A copy of the first information report (FIR) registered by the police shows that 22 people were not passengers but were blocking the way and causing obstruction to government works. The fora below rightly held that the vehicle was not used for commercial purposes," the counsel for Mr Ansari contended.
After hearing both sides and perusing the affidavit, NCDRC observed that Nabi Hussain was the driver of Mr Ansari and the vehicle was used to earn a livelihood. "There is no evidence that Mr Ansari was using the vehicle for large-scale business or for any travel agency. There is no evidence that the driver was carrying passengers in the regular course of business to make a profit. It can only be deduced from the affidavit that Mr Ansari was using the vehicle to earn a livelihood. The insurance company has clearly erred in repudiating the claim of Mr Ansari and the fora below had rightly observed in the favour of Mr Ansari," the bench says.
Further, it clarified that NCDRC's jurisdiction under Section 21 (b) Consumer Act is very limited. It says, "This Commission is not required to re-appreciate and reassess the evidence and reach to its own conclusion. The court can intervene only when the petitioner succeeds in showing that the Fora below have wrongly exercised its jurisdiction or there is a miscarriage of justice."
While upholding the orders passed by the district and state commission, NCDRC asked Reliance General Insurance to pay the entire insurance claim amount of Rs5.12 lakh, Rs10,000 as compensation and Rs2,000 as litigation costs to Mr Ansari.
(Revision Petition No2667 of 2015 Date: 1 February 2023)
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