Case: The Oriental Insurance Company Limited vs.

Chintaman (award s140 be appealed,

revision can’t lie) s173

Background:

- Civil revision petitions were referred to a Full Bench for further consideration.

- A petition under Article 227 of the Constitution was also submitted, leading to a referral to the
Full Bench.

- The Full Bench convened to hear both civil revision petitions and the Article 227 petition.

- A larger Bench was formed to reconsider the case and make necessary rulings based on the
issues raised.

Issues Raised:

- Revision petitions were filed by claimants contesting the rejection of compensation claims under
Section 140 of the Motor Vehicles Act.

- The main contention was whether decisions made under Section 140 constituted awards subject
to appeal.

Legal Framework:

- Chapter X of the Motor Vehicles Act addresses no-fault liability, with Section 140 defining
compensation for such cases.

- Chapter XII establishes Motor Accidents Claims Tribunals for adjudicating compensation
claims.

- Section 173 allows appeals against awards issued by Claims Tribunals.

Court's Reasoning:

- Parties sought legal recourse based on precedent set by Gaya Prasad's case, which held that no
appeal lies against decisions under Section 140.

- The Full Bench had differing views on the appealability of decisions under Section 140.

- The Court analyzed the definition of 'award' and found that decisions under Section 140 qualify
as awards.
- The principle that where an appeal lies, a revision cannot lie was applied.

- Petitioners were advised to amend their petitions to pursue their cases as appeals under Section
173.

Conclusion:

- The Court clarified that decisions under Section 140 are appealable and advised petitioners to
amend their petitions accordingly.

- Converting petitions into appeals under Section 173 provides petitioners with a formal avenue to
seek redress within the legal framework.

Case: The Oriental Insurance Company Limited vs. Meena Variyal (Motor vehicle accident)

**Case: The Oriental Insurance Company Limited vs. Meena Viryal**

**Background:**

- Suresh Chandra Variyal, an employee, died in a car accident while driving a company car
insured by The Oriental Insurance Company Limited.

- Variyal's widow and daughter filed a compensation claim under Section 166 of the Motor
Vehicles Act, 1988, alleging negligence on the part of the driver, Mahmood Hasan.

- The insurance company disputed the claim, asserting that Variyal himself was driving at the
time of the accident, thus denying liability.

**Key Points:**

- Witnesses supported the claim that Mahmood Hasan was driving, while Variyal was a
passenger.

- The insurance company argued that Variyal, being an employee, was not covered under the
insurance policy.
- The Tribunal held the owner of the vehicle accountable but absolved the insurance company of
liability.

- The High Court upheld the Tribunal's decision, prompting an appeal to the Supreme Court.

**Supreme Court's Decision:**

- The Supreme Court emphasized the importance of considering the unique circumstances of each
case rather than relying solely on legal precedents.

- It clarified that insurance coverage under Chapter XI of the Motor Vehicles Act primarily aims
to cover liabilities related to third parties and certain liabilities of employees under the
Workmen’s Compensation Act.

- The Court concluded that insurance companies are not liable to indemnify owners in cases
where the deceased was not the driver, and the liability does not fall under the Workmen’s
Compensation Act.

- It directed High Courts and Commissions to reconsider cases based on this clarified legal
position.

**Interpretation of the Law:**

- Chapter XI of the Motor Vehicles Act mandates insurance coverage for liabilities arising from
the use of vehicles in public places.

- The Act defines "third party" broadly, indicating that it includes entities beyond individuals.

- Insurance companies are not liable to indemnify owners if the deceased was not the driver, and
the liability does not fall under the Workmen’s Compensation Act.

In summary, the Supreme Court clarified the scope of insurance coverage under the Motor
Vehicles Act and directed reconsideration of cases based on this interpretation.

Conclusion:

- The insurance company was not liable as Variyal was not covered under the insurance policy as
an employee.

- The case underscores the importance of considering individual circumstances rather than blindly
following legal precedents.
- High Courts and Commissions are directed to review cases with this clarified legal position in
mind.

Case: Hari Om Agarwal vs. Oriental Insurance Co. Ltd.( Medical insurance,

Facts:

- The petitioner, a chartered accountant, obtained an Individual Mediclaim Policy from the
respondent insurance company after disclosing his existing medical conditions.

- The policy was renewed several times without any claims until the petitioner underwent CABG
surgery.

- The insurer repudiated the petitioner's claim, citing an exclusion clause related to pre-existing
conditions, and refused to reimburse the medical expenses.

- The petitioner alleged that the insurer's denial of the claim was arbitrary and unreasonable.

Issues:

- Whether the exclusion of liability under Clause 4.1 of the policy is justified?

Arguments of Petitioner:

- The petitioner fully disclosed his existing medical conditions during the policy application
process.

- The insurer accepted the proposal, issued the policy, and even renewed it after the petitioner's
surgery.

- The denial of reimbursement for medical expenses was arbitrary and amounted to an
attempt to escape liability.

- The insurer's refusal to process the claim was unreasonable and violated the principles of good
faith.

Arguments from Insurer:

- The court should not entertain the petition under Article 226 as alternative remedies exist,
such as civil proceedings or consumer forums.
- The insurer was justified in rejecting the claim under the exclusion clause related to pre-existing
conditions.

- The petitioner's failure to disclose vital information forfeited his right to claim reimbursement.

- The insurer's denial of liability was legal and justified under the terms of the policy.

Law/Section/Act Involved:

- Section 19 of the General Insurance Business Nationalization Act

- Interpretation of exclusion clause 4.1 of the insurance policy

Held:

- The court held that the insurer's denial of the claim was arbitrary and unreasonable.

- The exclusion clause related to pre-existing conditions cannot override the insurer's primary
liability.

- The insurer was directed to process the petitioner's claim and ensure reimbursement of medical
expenses within six weeks.

Case: Jacob Punnen & Anr v. United India Insurance Co Ltd (medical policy/insurance)

Facts:

- Mr. Jacob Punnen and his wife availed a medical insurance policy from United India Insurance
Co Ltd in 1982, which was renewed annually.

- In 2008, they renewed the policy for the period of 2008-2009 with a coverage of INR 8 lakh,
unaware of new terms introduced by the insurer.

- Mrs. Punnen underwent angioplasty surgery in 2008, and a claim of INR 3.82 lakh was
submitted, but the insurer only paid INR 2 lakh, citing a new clause limiting coverage.

- The Appellants filed a complaint before the District Consumer Disputes Redressal Forum, which
directed the insurer to pay the balance amount.
- The insurer challenged this order in the State Consumer Disputes Redressal Commission, which
reversed the decision, stating that the Appellants were bound by the policy terms.

- The Appellants approached the National Consumer Disputes Redressal Commission (NCDRC),
which upheld the State Commission's decision. They then appealed to the Supreme Court.

Issue:

Whether the Appellants could complain about mistakes in the policy terms and the consequences
thereof?

Decision:

- The Supreme Court found that there was no consensus on the introduction of a coverage cap, as
the new term was introduced unilaterally by the insurer without informing the Appellants.

- Applying the general law of avoidance of contract, the Court held that the Appellants could
insist on the old insurance policy.

- Emphasizing the principle of utmost good faith in insurance contracts, the Court held that the
insurer's non-disclosure of policy changes constituted deficiency in service under the Consumer
Protection Act, 1986.

- The Court allowed the appeal and granted medical relief to the Appellants, holding the insurer
liable for its failure to disclose changes in the policy terms.

Case: New India Assurance Company Limited vs. Mudit Roadways, 2023 (Fire insurance
and customs duty)

Background:

The Supreme Court dismissed an appeal in an insurance claim dispute case due to wrongful
repudiation of the claim by the appellants. The Court highlighted the importance of trust in the
insurer-insured relationship and addressed issues regarding the inclusion of customs duty in
the insurance claim filed by the insured.

Facts:

- The respondents purchased insurance policies from the appellants to cover risks against fire.

- A fire broke out at the insured warehouse of the respondents, and they raised a claim for the
stipulated amount, which was repudiated by the appellants.
- The National Consumer Disputes Redressal Commission (NCDRC) directed the appellants to
pay the claim amount with interest.

Contentions of the Appellant:

- The cause of the fire was negligence on the part of the insured during roof repair work.

- Storing hazardous chemicals during construction violated insurance policy conditions.

- The policy did not cover the premises of the fire-affected warehouse.

- Customs duty should not be included in the claim as the liability rests only upon the
importer.

Contentions of the Respondent:

- Survey reports indicated an electrical short circuit as the cause of the fire.

- There was no negligence on the part of the insured, and repair work did not violate policy terms.

- The warehouse location was mentioned in the policy, and essential repair work was necessary.

- Customs duty remission did not benefit the respondents as it applies to importers, not
custodians.

Observations of the Court:

- An insurance company cannot introduce new grounds for repudiation beyond those
mentioned in the letter of repudiation.

- The insured premises were covered by the policy, and repair work was essential and did not
violate policy terms.

- The insurer's reports were inconclusive and contradictory.

- Trust is essential in insurance contracts, and insurers must act in good faith and honor their
commitments.

Decision of the Court:

- The Court dismissed the appeal of the Insurance Company.

- The customs duty component of the claim was directed to be paid to the Customs Department
directly.

**Case: Lucena v. Craufurd**

**Background:**

- The case established the classical definition of insurable interest given by Lawrence, J., stating
that it exists when "if the event happens, the party will gain advantage, if it is frustrated, he will
suffer a loss."

**Facts:**

- According to statute, the Commissioners of Admiralty had a duty to care for Dutch vessels and
cargoes detained or brought into British ports.

- Certain Dutch vessels and their cargoes were seized by the British Government before the
Commissioners were formally authorized.

- After authorization, the Commissioners obtained insurance policies for the seized Dutch vessels
and cargoes.

- However, the ships were lost during their voyage to England.

**Defense of the Insurer:**

- The insurer argued that the Commissioners did not have an insurable interest in the ships at the
time of loss because their duty to care for the ships only applied after their arrival in British ports.

**Decision of the House of Lords:**

- The House of Lords upheld the insurer’s defense.

- They reasoned that since the duty of the Commissioners of Admiralty was specifically tied to
vessels and cargoes already within British ports, their insurable interest in the ships did not arise
until the ships arrived in the ports.
- Therefore, at the time of loss during the voyage, the Commissioners did not have a sufficient
interest in the ships to warrant insurance coverage.

New India Assurance Company Limited vs Andhra Fishermen Central Co-Operative

(Marine Hull Policy, boat broke- propeller shaft, maritime peril)

Case Summary

Facts:
The plaintiff, a Cooperative Society, owned a mechanized fishing boat insured under a Marine Hull
Policy with the defendant insurance company. The boat sank due to the breakage of the propeller shaft
while returning from a voyage. The plaintiff claimed compensation under the policy, stating it was a
result of maritime perils covered by the policy.

Issues:
1. Whether the plaintiff is entitled to the compensation amount under the Insurance Policy.
2. Whether the trial Court's decree aligns with legal principles.
3. If so, what relief should be granted.

Arguments of the Parties:

- Plaintiff: Asserted that the loss was due to maritime perils covered by the policy, supported by
evidence including the policy itself, letters, and witness testimony. Contended that the trial Court
rightly decreed the suit.
- Defendant: Argued that the loss did not fall under the policy's coverage, as it was not caused by
maritime perils but rather due to negligence or wear and tear. Insisted the trial Court erred in granting
the decree.

Law/Sections/Act Involved:
- Marine Insurance Act, 1963, Section 2(e): Defines "maritime perils" as perils consequent to
navigation of the sea.
- Marine Insurance Act, 1963, Section 55: Deals with included and excluded losses under an
insurance policy.

Held:
The Court affirmed the trial Court's decree, finding that the loss fell within the terms and conditions of
the insurance policy. Despite lacking additional evidence, the existing evidence, including the policy
itself, supported the plaintiff's claim. The Court rejected the defendant's argument that the loss was
not due to maritime perils, concluding that the breakage of the propeller shaft constituted a maritime
peril covered by the policy. The appeal was dismissed, and no costs were awarded due to the nuanced
interpretation of the policy terms by both parties.
Malati Sardar vs. National Insurance Company Limited and Ors. 2016(1) ( motar accident
claim. 3rd party insurance)

Facts:
- The deceased, Diganta Sardar, was a 26-year-old school teacher who died in a motor accident on 7th
May 2008 in Hooghly, West Bengal.
- He was hit by Bus No. WB/15-A-4959 while traveling as a pillion rider on a motorcycle.
- The appellant, who was Diganta Sardar's father, filed for compensation under Section 166 of the
Motor Vehicles Act, 1988, before the Motor Accidents Claims Tribunal at Kolkata.

Issues:
- The main issue is whether the Kolkata Tribunal had the jurisdiction to entertain the compensation
claim when the accident occurred outside Kolkata's jurisdiction and the claimant resided outside
Kolkata's jurisdiction.
- Another issue is whether the High Court was justified in setting aside the Tribunal's award solely on
the ground of lack of territorial jurisdiction.

Arguments of the Parties:

- The respondent company argued that the Tribunal lacked territorial jurisdiction because the accident
occurred in Hooghly, and both the claimant and the owner of the bus resided in Hooghly.
- They relied on previous court decisions to support their argument.
- The appellant argued that jurisdiction was available under Section 166(2) of the Act, which
includes the place of business for a juristic person.
- They also cited a previous court decision to support their position and argued that the High Court's
decision contradicted the law laid down by the Supreme Court in a previous case.

Law/Section/Act Involved:
- The case involves Section 166(2) of the Motor Vehicles Act, 1988, which deals with the jurisdiction
of Claims Tribunals.
- Additionally, the principles of territorial jurisdiction as outlined in the Code of Civil Procedure
(CPC) were also considered.

Held:
- The Supreme Court held that the High Court was not justified in setting aside the Tribunal's award
solely on the ground of lack of territorial jurisdiction.
- Referring to previous Supreme Court decisions, the Court emphasized that objections to territorial
jurisdiction should not be entertained unless there is a failure of justice.
- The Court ruled that the Tribunal's jurisdiction was wider than that of a civil court and could follow
the provisions of the CPC.
- Since the insurance company, the main contesting party, had its business in Kolkata, filing the claim
petition there did not prejudice any party.
- Therefore, the Court allowed the appeal, set aside the High Court's judgment, and restored the award
of the Tribunal.

Narsingh Ispat Ltd vs Oriental Insurance Co Ltd (Standard fire and special peril policy)
Facts:
- Narsingh Ispat Ltd (the appellant) took a Standard Fire and Special Perils Policy from Oriental
Insurance Co Ltd (the respondent) for their Engineering Workshop and Plant in Jharkhand.
- The policy period was from 28th June 2009 to 27th June 2010, with a total sum assured of Rs.
26,00,00,000/-, and the appellant paid a premium of Rs. 2,20,462/-.
- The policy covered losses due to fire, lightning, explosion, riots, strike, etc.
- The appellant lodged a claim based on an incident on 23rd March 2010, where a group of 50-60
people with weapons entered their factory premises in Jharkhand, causing substantial damage to
property.
- The appellant filed a complaint with the National Consumer Disputes Redressal Commission (the
Commission) against the respondent for deficiency in service, seeking a monetary relief of Rs.
1,51,35,780/- for the loss suffered.
- The respondent repudiated the claim citing the "Terrorism Damage Exclusion Warranty" clause
in the policy.

Issues:
- Whether the exclusion clause regarding terrorism in the insurance policy justified the repudiation of
the appellant's claim.
- Whether the damage caused to the appellant's property constituted an act of terrorism as per the
policy definition.

Arguments of the Parties:

- The appellant argued that the incident did not constitute an act of terrorism as defined in the policy.
They contended that the burden was on the respondent to prove that the exclusion clause applied.
- The appellant also argued that the respondent failed to discharge this burden and that the policy
should be construed in their favor.
- The respondent argued that the damage caused was due to an act of terrorism, as evidenced by the
FIR and the application of certain sections of the Indian Penal Code.

Law/Section/Act Involved:
- The case involves interpretation of the "Terrorism Damage Exclusion Warranty" clause in the
insurance policy.
- The Consumer Protection Act, 1986, under which the appeal was filed, is also relevant.

Held:
- The Court held that the respondent failed to prove that the incident fell within the scope of the
exclusion clause regarding terrorism.
- The Court found that the incident did not conclusively prove to be an act of terrorism as defined in
the policy.
- The Court noted that the policy explicitly covered damage caused by riots or the use of violent
means.
- Therefore, the decision to repudiate the claim based on the exclusion clause was not justified.
- The Court set aside the Commission's judgment and ordered the complaint to be heard afresh,
directing the respondent to deposit the amount assessed for the loss pending the complaint.
- The Court left the decision on the quantum of the amount payable to the appellant to the
Commission.
Bajaj Allianz General Insurance v. The State Of Madhya Pradesh

Facts:
- The respondent government purchased a "Transit Marine Insurance Policy" from the appellant
insurance company to cover the transportation of a Bell-430 Helicopter from Langley, Canada, to
Bhopal, India.
- The policy was issued with a coverage of ₹20,00,00,000, and the route for transportation was
initially specified from Langley to Bhopal.
- The helicopter was transported in a knocked-down state by air to New Delhi, where it cleared
customs and was shifted to a hangar.
- Damage to the helicopter's window and tail boom was reported after inspection at the hangar.
- The insurance company repudiated the claim, stating that the damage occurred after the policy
duration ended.
- The National Consumer Disputes Redressal Commission (NCDRC) found a deficiency of service
and awarded compensation and interest to the respondent.

Held:
- The Supreme Court held that the transportation of the helicopter in a knocked-down state had ended
when it was unpacked at the hangar in New Delhi for assembly.
- Assembling the helicopter for flight to Bhopal was unrelated to the transportation covered by the
policy.
- The policy only covered risks associated with the transportation of the helicopter, not its flight or
operation.
- The NCDRC incorrectly concluded that assembling the helicopter in New Delhi was part of the
ordinary transit course.
- The insurance policy did not cover risks associated with the assembled helicopter.
- The Court dismissed the appeal, affirming the NCDRC's decision regarding the insurance company's
liability and the awarded compensation and interest to the respondent.

K. Raghavayya& Others vs. National Insurance Company, Iii (2009) CPJ 75 (SC)
(tobacco business, Fire Insurance Policy, limitation, time barred claim)

Facts:
- The appellant firm, engaged in the tobacco business, took out a Fire Policy with National Insurance
Company against loss or damage by fire for a period of 4 months.
- A fire broke out in their godowns on 22nd/23rd March 1988, resulting in the destruction of their
tobacco stock.
- The appellant reported the incident to the insurance company and the bank, but the bank also lodged
a FIR against the appellant.
- The bank later preferred a claim with the insurance company for the loss.
- The insurance company, however, denied issuing claim forms to the appellant, citing the claim as
time-barred.

Issues:
- Whether the complaints filed by the appellant were barred by limitation under Section 24A of the
Consumer Protection Act, 1986.
- Whether the appellant had sufficient cause for not filing the complaint within the statutory period.

Arguments of the Parties:

- Appellant: Argued that the bank, being a joint policyholder, was equally responsible for making a
claim, but failed to pursue it, resulting in deficiency in service towards the appellant. Also claimed
that the insurance company's non-responsiveness and refusal to issue claim forms amounted to
deficiency in service.
- Insurance Company: Contended that the appellant's complaint was time-barred as it was filed after a
lapse of 9 years from the date of the incident. Stated that no formal claim supported by documents
was made by the appellant as required under the policy terms.

Law/Section/Act Involved:
- Section 23 of the Consumer Protection Act, 1986: Deals with appeals challenging orders of the
National Consumer Disputes Redressal Commission.
- Section 24A of the Consumer Protection Act, 1986: Bars any forum from admitting a complaint
unless filed within two years from the date of accrual of the cause of action.

Held:
- The cause of action for the complaint arose on the date of the fire incident, and the complaints were
filed well beyond the statutory period of limitation.
- The appellant's request for claim forms was made after a significant delay, and the insurance
company's refusal to issue them did not extend the limitation period.
- The complaints were dismissed as time-barred, and the Commission's decision was upheld, resulting
in the dismissal of the appeal.