National Insurance Company Ltd. vs R.P. Sharma
2010 Latest Caselaw 3731 Del

     IN THE HIGH COURT OF DELHI AT NEW DELHI
              RFA No. 486/2006
                        Judgment delivered on: 11.08.2010

National Insurance Company Ltd.         ..... Appellant
                    Through: Mr. Manoj R. Sinha, Advocate
                    Versus
R.P. Sharma                      ..... Respondent
                    Through: Mr. Ramesh Kumar, Advocate

CORAM:
HON'BLE MR. JUSTICE KAILASH GAMBHIR,

1. Whether the Reporters of local papers may          Yes
   be allowed to see the judgment?

2. To be referred to Reporter or not?                 Yes

3. Whether the judgment should be reported             Yes
   in the Digest?
KAILASH GAMBHIR, J. Oral:
*

1. By this appeal filed under Section 96 of the Code of

Civil Procedure, 1908, the appellant seeks to challenge the

judgment and decree dated 2.5.2006 passed by the learned

Additional District & Sessions Judge, Delhi in suit No. 308/2004

thereby decreeing the suit in favour of the respondent for a

sum of Rs.3, 50,000/- with interest @ 9% per annum from the

date of repudiation of the claim till realization of the decretal

amount.

2. Brief facts of the case relevant for deciding the

present appeal are that the respondent is the registered owner

of the truck bearing no. HR 38 7885 attached to M/s Chetak

International Cargo Ltd. for the purpose of carriage of goods of

customers to various destinations throughout the country and

that the aforesaid vehicle was insured with the appellant

insurance company for a sum of Rs. 3, 50,000. The aforesaid

vehicle while enroute from Faridabad to Madras carrying auto

parts self ignited near Nawasphate, Madhya Pradesh resulting

in total loss of the truck. Thereafter the respondent submitted

his claim with the appellant which was rejected on the ground

that the claim was not admissible under the terms and

conditions of the policy as the driver of the vehicle at the time

of the accident did not hold a valid licence and hence

repudiated the claim of the respondent. Thereafter the

respondent filed a suit for recovery bearing suit no. 308/04 and

vide judgment and decree dated 2.5.2006 the suit has been

decreed in favour of the respondent for an amount of Rs.

3,50,000 with an interest @ 9% p.a from the date of

repudiation of the claim till the realization of the decretal

amount alongwith the costs of the suit. Aggrieved with the said

judgment and decree the appellant has preferred the present

appeal.

3. Counsel for the appellant submits that the ld. Trial

Court has failed to appreciate the fact that the license of the

driver who was driving the vehicle in question was fake.

Counsel for the appellant therefore submits that the claim filed

by the respondent was rightly repudiated by the appellant

company due to the breach of the policy terms. Counsel for

the appellant further contends that the ld. Trial court

overlooked the fact that the respondent himself has given

consent to settle the claim for an amount of Rs.1,35,000/-

excluding the value of salvage and therefore the respondent is

estopped under law to have claimed a higher amount than the

agreed amount. Counsel for the appellant also contends that

ld. Trial Court also committed another illegality by not

deducting the value of the salvage and decreed the suit for the

total insured sum. Drawing attention of this court to the

written arguments filed by the respondent, the counsel

contends that the respondent in his written arguments has

claimed the total loss at Rs.2,42,500/- himself but ignoring the

stand of the respondent the ld. Trial Court has granted a

decree for an amount more than what has been claimed by the

respondent. Based on these submissions the counsel states

that the said decree passed by the ld. Trial Court is liable to be

set aside.

4. Opposing the said submissions of the counsel for the

appellant, counsel appearing for the respondent submits that

the appellant failed to lead any evidence before the Ld. Trial

Court in support of its allegation that the license of the driver

at the time of the accident was fake. Counsel for the

respondent further submits that the appellant also did not

adduce any evidence to prove that the vehicle caught fire

because of some negligence on the part of the driver or it was

on account of lack of driving skills of the driver which

contributed to the incident. Counsel for the respondent also

referred to the judgment of the Supreme Court in the case of

Jitender Kumar Vs. Oriental Insurance Co. Ltd. & Ors.,

2003 ACJ 1441, where in identical facts, the Court held that

holding of an invalid license has no nexus to self ignition and

therefore claim on such ground cannot be repudiated by the

Insurance Company. Counsel for the respondent further

submits that reliance on this very judgment was placed by the

appellant itself and therefore the appellant cannot take any

contrary stand to the settled legal position.

5. Counsel for the respondent further submits that so

far the quantum of compensation is concerned, the earlier

consent given by the respondent became inconsequential as

the appellant itself did not care to pay the amount as per the

settlement and rather had repudiated the claim of the

respondent. Counsel thus states that the appellant now cannot

fall back on the said consent given by the respondent. So far

the stand taken by the respondent in his written arguments is

concerned, counsel submits that a more realistic assessment of

the loss was made by the respondent after deducting the

salvage value of the vehicle and 5% depreciation price.

Counsel, however, states that the respondent had claimed an

interest @ 12% per annum but the same was varied by the ld.

Trial Court and granted @ 9% per annum. Based on these

arguments counsel submits that the ld. Trial Court has passed

the judgment and decree on correct appreciation of the facts

and law involved.

6. I have heard counsel for the parties at considerable

length and have given my thoughtful consideration to the facts

of the case.

7. No evidence was led by the appellant to prove that

the driver was holding a fake license. The appellant has also

not produced any evidence to prove that the vehicle caught

fire due to any negligence or lapse on the part of the driver. It

is an admitted fact that the vehicle in question was not

involved in any road accident and the same caught fire after

the driver had smelt burning of some cloth like object and on

being informed by a passerby motorcyclist that the smell was

emanating from the truck. The Ld. Trial Court has referred to

the judgment of the Apex Court in the case of Jitender Kumar

(Supra) where the Apex Court took a view that where the

incident had occurred due to no fault of the driver, the

Insurance Company could not have repudiated the claim for

damages on the ground that the driver had no valid driving

license to drive the vehicle. The Ld. Trial Court has also

referred to Section 149 (2) (a) (ii) of the Motor Vehicles' Act

which also does not permit the insurance company to repudiate

the claim for damages not referable to any of the acts

committed by the driver. There is thus no force in the

contention raised by the counsel for the appellant that the

appellant has rightly repudiated the claim of the respondent on

account of the alleged breach of policy terms and conditions.

8. I also do not find any force in the argument of the

counsel for the appellant contending that the respondent

earlier had settled the matter for a sum of Rs.1,35,000/- as

admittedly after the said settlement instead of paying the said

amount the appellant had repudiated the claim of the

respondent. Once the appellant itself did not come forward to

honour the said settlement, therefore the appellant now cannot

be allowed to derive any benefit from the said offer given by

the respondent. Hence, this plea of the counsel for the

appellant is also rejected.

9. So far the argument of the counsel for the appellant

with regard to the grant of decree for the total sum insured is

concerned, I find some merit in his submission. The

respondent has not disputed the fact that in the written

arguments filed by him, the stand taken by him was that a sum

of Rs.2,42,500/- was payable by the appellant insurance

company after giving allowance of Rs.90,000/- towards salvage

of the vehicle and Rs.17,500/- towards 5% depreciation. With

the reduction of these two amounts from the sum insured i.e.

Rs.3,50,000/-, a total amount of Rs.2,42,500/- becomes

payable. It is quite evident that the ld. Trial Court has ignored

the said admission on the part of the respondent and therefore

the impugned judgment and decree is modified to that limited

extent of replacing the decretal amount from Rs.3,50,000/- to

Rs.2,42,500/-.

10. So far the argument of the counsel for the

respondent that the respondent had claimed an interest @ 12%

per annum, this court is not inclined to interfere with the

interest rate which has been rightly granted by the Ld. Trial

Court in exercise of its discretion @ 9% per annum.

11. In the light of the above discussion, the present

appeal is allowed to the limited extent of modifying the said

judgment and decree. The respondent shall now be entitled to

the grant of judgment and decree for a sum of Rs.2, 42,500/-

with interest @ 9% per annum from the date of repudiation of

his claim i.e. dated 20.06.2001 till realization of the decretal

amount. The respondent is also granted costs of the suit.

KAILASH GAMBHIR, J August 11, 2010 pkv