Rajesh Kumar vs National Insurance Co. Ltd

2024 INSC 993 REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 14615-14616/2024 SPECIAL LEAVE PETITION (CIVIL) NOS. 2219-2220 OF 2020

RAJESH KUMAR ...APPELLANT(S)

VERSUS

NATIONAL INSURANCE CO. LTD. …RESPONDENT(S)

JUDGMENT

PAMIDIGHANTAM SRI NARASIMHA, J.

1. Leave granted.

2. The present appeals challenge the order dated 16.07.2019 in

Revision Petition Nos. 878-879/2019 passed by the National

Consumer Disputes Redressal Commission,1 which had

allowed the respondent’s appeal and reduced the amount of

payable insurance. The appellant here is the consumer who

sought that the respondent-insurer release the entire Signature Not Verified Digitally signed by INDU MARWAH insurance amount in his favour. The District Consumer Date: 2024.12.17 17:30:27 IST Reason:

1 Hereinafter, referred to as the ‘National Commission’.

1 Disputes Redressal Commission2 had allowed the complaint

partly, whereas the State Consumer Disputes Redressal

Commission3 modified it and allowed the complaint in full. The

respondent then approached the National Commission,

resulting in the impugned order. The brief facts required for

the disposal of these appeals are as follows.

3. The appellant had purchased a Private Car Insurance Policy

bearing Policy No. 420503/31/12/6100000851 from the

respondent for a vehicle he owned. This policy was applicable

for the period 02.07.2012 to 01.07.2013 and it served to

compensate the appellant in case the insured vehicle met with

an accident. The maximum sum that could be claimed from

the respondent was the ‘Insured Declared Value’, which was

fixed at Rs. 5,02,285/-. While this policy was in force, the

appellant met with an accident on 25.03.2013 while he was

driving the said vehicle and a cow suddenly turned up before

it. In an attempt to avoid the animal, he made a sudden turn

which caused his car to turn upside down and fall in a ditch.

2 Hereinafter, referred to as the ‘District Commission’.

3 Hereinafter, referred to as the ‘State Commission’.

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4. At the time of the accident, the appellant had a co-passenger

along with him. While both the occupants of the car had

suffered some injuries, the appellant felt that the co-passenger

needed immediate attention. The appellant rushed the co-

passenger to a hospital, leaving the car capsized in the ditch.

In this state, one of the wires in the car short-circuited, which

set the car on fire and it was damaged substantially. While the

appellant lodged an FIR on the same day, he wrote to the

respondent only on 28.03.2013. The respondent appointed a

surveyor, who assessed the damage to be Rs. 53,543.97/- but

stated that the damage occurred due to the appellant’s

omission to take care of the vehicle. Accordingly, the

respondent denied the insurance claim citing delay in the

intimation and on having left the vehicle unattended, exposing

it to further damage.

5. The appellant had approached the District Commission

claiming Rs. 5,02,285/- being the insured value of the vehicle.

Having considered the matter in detail, the District

Commission held that the delay in intimating the insurer was

caused due to the appellant’s attempts to rescue his co-

passenger and that, by itself, cannot be fatal to the insurance

3 claim. The Commission also found that the appellant’s claim

was genuine and it is evidenced by prompt reporting to the

police. After a detailed examination, the District Commission

held that even assuming the short-circuiting could have been

avoided by monitoring the vehicle, the appellant would still be

entitled to insurance amount on a non-standard basis, that is,

with minimal deduction. Hence, it partly allowed the complaint

by its order dated 09.11.2016 directing the respondent to

release 75% of the insurance amount, i.e., Rs. 3,76,713/-.

6. Aggrieved, both the parties filed cross-appeals before the State

Commission. The State Commission allowed the appeal of the

appellant fully and directed the release of the entire insured

sum of Rs. 5,02,285/- with 9% interest from the date of filing

the complaint till actual realization.

7. The insurance company, the respondent herein, filed a

revision petition under Section 21(b) of the Consumer

Protection Act, 1986 before the National Commission. By the

order impugned before us, the National Commission partly

allowed the appeal and reduced the insurance amount to just

Rs. 53,543/-. While upholding the findings of the District and

State Commissions to be correct in finding the delay in

4 intimation not being fatal and also that the claim of the

accident was promptly reported to the police, the Commission,

however proceeded to rely on Condition no. 4 of the policy to

reduce the insurance payable. As per Condition No.4, the

vehicle could not have been left unattended by an insured and

if further damage is done because the vehicle is unattended

and proper precaution is not taken, then claim is beyond the

insurance cover. In the facts of the case, the commission came

to the conclusion that the damage due to the short-circuiting

was ‘damage following the accident’ and caused squarely due

to the vehicle being unattended. Hence, it held that the

damage due to short-circuiting was not payable and the only

amount that needed to be paid by the respondent was the

damage attributed solely to the accident on 25.03.2013, and

not to the short-circuiting following the accident.

8. Challenging the above referred reasoning and conclusions of

the National Commission, the appellant filed the present

appeals. We have heard Mr. Avinash Sharma, Ld. Counsel

appearing for the appellant and Mr. Abhishek Kumar, Ld.

Counsel appearing for the respondent.

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9. Mr. Sharma submitted that the National Commission went

beyond the scope of its revisional jurisdiction and relied on the

precedents in Momna Gauri v. Scooter India Ltd.,4 and Rubi

Chandra Dutta v. United India Insurance Co. Ltd.5. He further

submitted that in cases of insurance pertaining to motor

vehicle accidents, the liability of the insurer must be

interpreted strictly.

10. On the other hand, Mr. Abhishek Kumar, Ld. Counsel

appearing for the respondent submitted that the National

Commission had correctly exercised its revisional jurisdiction

in the present case. He submitted that the courts below

disregarded the survey report, which is patently erroneous. As

for whether the National Commission’s was justified in

interfering with the concurrent findings, he submitted that the

District Commission also found that the vehicle was left

unattended by the appellant however, the State Commission

did not answer the question as to why the vehicle was left

exposed to further damage for a period of three days. He would

therefore submit that interference in the revisional jurisdiction

4 (2014) 13 SCC 307.

5 (2011) 11 SCC 269.

6 against the concurrent findings is fully justified. He also

argued that the National Commission correctly applied

Condition No. 4 of the policy in excluding the damage caused

by the short-circuiting.

11. Analysis: We have given the matter our anxious consideration

and considered the submissions of both the sides carefully.

Section 21(b)6 of the Consumer Protection Act, 1986 vests the

National Commission with revisionary jurisdiction. It allows

the National Commission to invoke the same if the State

Commission has exercised a jurisdiction not given to it by law,

or has failed to exercise it at all, or has exercised the same but

with illegally or with material irregularity.

12. On a careful scrutiny of the records of the case, it is seen that

both the District and State Commissions had reached a

concurrent finding about whether the delay in intimation to

the respondent was justified. Both held that this delay was

6 “21. Jurisdiction of the National Commission.—

Subject to the other provisions of this Act, the National Commission shall have jurisdiction—

(a) to entertain—

(i) complaints where the value of the goods or services and compensation, if any, claimed exceeds rupees one crore; and

(ii) appeals against the orders of any State Commission; and

(b) to call for the records and pass appropriate orders in any consumer dispute which is pending before or has been decided by any State Commission where it appears to the National Commission that such State Commission has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested, or has acted in the exercise of its jurisdiction illegally or with material irregularity.”

7 justifiable and not fatal to the insurance claim. Both the courts

had also reached the finding that the damage took place in two

phases: (a) once when the vehicle fell into a ditch and capsized;

and (b) when the short-circuiting took place due to the car

remaining in that state.

13. In our opinion, the National Commission could not have

interfered with pure finding of fact arrived at by the District

and State Commissions while exercising revisional

jurisdiction. It is unclear as to how the National Commission

perceived that the State Commission exercised jurisdiction not

vested in it or has failed to exercise jurisdiction vested in.

There is nothing to indicate in the decision of the National

Commission as to whether there is any illegality in the

approach adopted by the State Commission or that it had

acted with material irregularity.

14. The other ground that the respondent has raised before us is

that the survey report was disregarded by the District and

State Commissions but the National Commission has correctly

examined and relied on it. This submission cannot be

accepted, since the State Commission had examined the

survey report in detail and in fact found it to be lacking. It

8 stated that the surveyor’s claim that the vehicle was left

unattended cannot be accepted since the appellant had

justifiable reasons for the same. Furthermore, the finding of

the surveyor that the short-circuiting was caused by the

appellant himself was not based on any evidence.

15. This Court had the occasion to examine the scope and ambit

of jurisdiction of the National Commission while exercising

revisional jurisdiction. In Sunil Kumar Maity v. State Bank of

India & Ors.,7 it was held that the conditions laid down in Section 21(b) are the only parameters under which a revision

may be invoked. If a document has already been considered

and rejected by the State Commission, a revision does not lie

merely because the National Commission has a different view

on the same. Similarly, in Rajiv Shukla v. Gold Rush Sales &

Services Ltd.,8 it was laid down that in cases where the courts

below have reached findings on facts, the jurisdiction of

revision is very limited and must be invoked only when there

is a patent illegality in the findings. In Rubi Chandra (supra) it

7 2022 SCC OnLine SC 77.

8 (2022) 9 SCC 31.

9 was held that even if no patent error, the revisional jurisdiction

may be invoked in a case of gross miscarriage of justice.

16. In the present case, no miscarriage of justice is made out by

the respondent. The State Commission has addressed all the

issues raised before it and found the delay in intimation to be

reasonable and that the insurance claim is payable on the

damage due to the accident as well as the short-circuiting. The

State Commission also examined the genuineness of the

accident’s claim by considering the police report and discarded

the surveyor’s report for lack of evidence. It then directed the

respondent to pay the entire insured sum giving its reasons

for the same. Hence, the appellant is correct in stating that the

National Commission has transgressed its jurisdiction by

interefering with the State Commission’s order.

17. The approach of the State Commission is also correct in

interpreting and disapplying Condition no. 4 of the insurance

policy. Condition No.4 is reproduced hereinbelow for ready

reference:

“ […]

4. The insured shall take all reasonable steps to safeguard the vehicle from loss or damage and to maintain it in efficient condition and the company shall have at all times free and full access to examine the vehicle or any part thereof or any driver or employee of the insured. In the event of any accident or breakdown, the vehicle shall not be left

10 unattended without proper precautions being taken to prevent further damage or loss and if the vehicle be driven before the necessary repairs are effected any extension of the damage or any further damage to the vehicle shall be entirely at the insured's own risk.

[…]”

18. In TEXCO Marketing Pvt. Ltd. v. TATA AIG General Insurance

Co. Ltd.9, this Court explained the principles of interpreting

and applying exclusionary clauses in insurance policy.

Condition No. 4 merely prescribed that in the event of any

accident, the vehicle shall not be left unattended without

proper precaution being taken. While interpreting such a

clause the Court/Commission or Tribunal will see whether the

said obligation has been complied with reasonably or not. The

context in which accident occurs and the circumstances that

prevailed at the time of accident are extremely important to

conclude whether the insured has taken reasonable care or

not. The facts of the present case are amply clear that the

appellant was acting under compelling circumstances when he

had to take his co-passenger to a hospital immediately as his

condition was precarious. It is not disputed that the co-

passenger had also succumbed to the injury. It is also difficult

to imagine that how he could have prevented short-circuiting

9 (2023) 1 SCC 428.

11 of the vehicle which had fallen into a ditch. We are of the

opinion that the State Commission has come to a correct

conclusion that Condition No.4 would not apply in the facts

and circumstances of the case. In any event, the respondent

has not explained as to how the unavailability of the appellant

during the said period has led to further damage of the vehicle

and that burden heavily lies on the respondent and the same

was not discharged10.

19. As regards the delay in intimation is concerned, we may refer

to the decision of this Court in Om Prakash v. Reliance General

Insurance & Anr.,11 where it was held that the delay may be

condoned if it is properly explained.

20. Conclusion: For the reasons stated above, we allow the

present appeals and set aside the impugned order dated

16.07.2019 passed by the National Commission in Revision

Petition Nos. 878-879/2019 and restore the judgment and

order of the State Commission directing the insurer to release

the entire insured declared value of Rs. 5,02,285/- to the

appellant with 9% interest from the date of the consumer

complaint till the date of realization.

10 National Insurance Co. Ltd. v. Ishar Das Madan Lal, (2007) 4 SCC 105 11 (2017) 9 SCC 724.

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21. There shall be no order as to costs.

………………………………....J. [PAMIDIGHANTAM SRI NARASIMHA]

………………………………....J. [SANDEEP MEHTA]

NEW DELHI;

DECEMBER 17, 2024.

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