The National Consumer Disputes Redressal Commission (NCDRC) has ruled in favor of a complainant, K. Subbulakshmi, in a case against Bharti Axa General Insurance Company. The complainant’s Eicher Van was insured with the company, but when the vehicle was involved in an accident, the insurance company repudiated the claim due to overloading. The company claimed that the vehicle was carrying 11.2 tonnes of load, exceeding the permitted capacity of 9.2 tonnes.
The complainant filed a consumer complaint before the District Consumer Disputes Redressal Commission, Coimbatore, which was dismissed. The complainant then filed a first appeal before the State Consumer Disputes Redressal Commission, Tamil Nadu, which directed the insurance company to disburse Rs. 2,51,723/- to the complainant. The insurance company filed a revision petition before the NCDRC, which was heard by a bench consisting of AVM J. Rajendra and Mr. Justice Anoop Kumar Mendiratta.
The NCDRC referred to a Supreme Court judgment, Ashok Kumar vs New India Assurance Co. Ltd., which held that only a fundamental breach of policy terms can justify a full repudiation of a claim. The NCDRC observed that the vehicle was duly registered and had a valid insurance policy at the time of the accident, and that the driver had a valid driving license. The only contention between the parties was regarding the carrying capacity of the vehicle.
The NCDRC held that overloading of the vehicle does not constitute a fundamental breach, and therefore, the insurance company was liable to pay 75% of the assessed amount on a non-standard basis. The commission directed the insurance company to pay Rs. 1,88,792 (75% of the assessed amount) along with 7% interest per annum from the date of repudiation till the date of final payment, within two months from the date of the order. If the payment is delayed, the simple interest will increase to 10% per annum.
This judgment sets a precedent for insurance companies, emphasizing that overloading of a vehicle does not necessarily constitute a fundamental breach of policy terms, and that insurers may still be liable to pay a portion of the claim amount even if the vehicle is overloaded at the time of the accident. The NCDRC’s decision is a significant victory for consumers, as it ensures that insurance companies do not unfairly repudiate claims based on minor breaches of policy terms.