Two Minors Treated As One Unit For Accident Claim, Uttarakhand State Commission Dismisses National Insurance Appeal

Brief Facts:

The Complainants' late father owned a vehicle which was insured with National Insurance Co. Ltd. (“Insurance Company”). During the subsistence of the policy, the deceased father along with his wife and one of the sons was travelling from Dehradun to Rudraprayag. Due to a technical defect, an accident occurred at Saknidhar in Devprayag, when the driver lost control of the vehicle. The car was totally damaged and the deceased father, his wife and son were declared dead.

The incident was immediately reported to P.S. Devprayag, where an FIR was registered. The matter was also reported to the Insurance Company. Upon receiving the information, the Insurance Company deputed its surveyor who collected the documents and went to the spot. Subsequently, the Insurance Company repudiated the claim amount and closed the claim file. Despite several attempts by the Complainants to contact the Insurance Company, the claim amount was not paid. Feeling aggrieved, the Complainants filed a consumer complaint in the District Consumer Disputes Redressal Commission, Rudraprayag, Uttarakhand (“District Commission”).

The Insurance Company admitted that the vehicle was insured with it subject to the terms and conditions of the policy. After receiving the survey report and the investigation report, it was observed that six persons were traveling in the vehicle at the time of the accident, against the seating capacity of five. The survey report and claim form indicated that the vehicle got unbalanced and fell into a ravine. Due to the overloading of the vehicle, which breached the terms and conditions of the policy, the claim was deemed not payable.

The District Commission allowed the complaint and directed the Insurance Company to pay Rs. 1,89,451/- to the Complainant with 6% interest. Dissatisfied by the decision, the Insurance Company filed an appeal before the State Consumer Disputes Redressal Commission, Uttarakhand (“State Commission”).

Observations of the State Commission:

The State Commission noted that at the time of the accident, the insured vehicle was being driven by the Complainants' father and was occupied by his wife, son, and three relatives. The driving license of the deceased father was valid on the date of the accident. Further, the claim was genuine and payable as per the terms and conditions of the policy. However, at the time of the accident, the vehicle was occupied by six persons (four adults and two minors), while the seating capacity as per the Registration Certificate was five, including the driver.

The Insurance Company argued that the District Commission failed to appreciate that the Complainants were not entitled to the full claim amount of Rs. 1,89,451/- and that 25% should have been deducted on a non-standard basis due to the overloading of the vehicle. The surveyor report noted that if two minors were travelling in the vehicle, they would be considered one unit. The surveyor did not specifically allege overloading, stating that the vehicle's seating capacity was five persons, but six individuals, including two minors, were inside the vehicle at the time of the accident.

Considering these facts, the State Commission held that two minors in the car would be considered as one unit only. Therefore, there was no violation of the terms and conditions of the insurance policy. Since the Complainants did not file any cross-appeal for an enhancement of the claim amount, they were not entitled to more than what was awarded by the District Commission. Therefore, the appeal was dismissed, and the judgment passed by the District Commission was upheld.

Case Title: National Insurance Company Ltd. and Anr. vs Kanchan Paliyal and Anr.

Case No.: 19.07.2024

Advocate for the Appellants: Smt. Anjali Gusain

Advocate for the Respondents/Original Complainants: Shri Arun Uniyal

Date of Pronouncement: 19.07.2924