The Jammu & Kashmir State Consumer Disputes Redressal Commission, comprising President (O) Nighat Sultana and Member Maheep Gupta, held IFFCO Tokio General Insurance Co. Ltd. liable for deficiency in service for repudiating the complainant's insurance claim solely on the ground of overloading.

The Commission observed that although the vehicle was overloaded, the insurer failed to prove that it had any direct nexus with the accident.

Facts:

The complainant, Ajab Singh, was the owner of a commercial vehicle insured with IFFCO Tokio General Insurance Co. Ltd. During the subsistence of the insurance policy, the vehicle met with an accident, prompting the complainant to lodge an insurance claim for the loss suffered. The insurer appointed a surveyor, who assessed the net loss at ₹28,63,500 on a net-of-salvage basis. However, instead of settling the claim, the insurance company repudiated it on the ground that the vehicle was allegedly overloaded at the time of the accident.

According to the insurer, the insured vehicle had a permissible payload of 13,500 kg but was carrying 15,050 kg (approximately 350 cubic feet of sand) at the time of the accident, resulting in an excess load of 1,550 kg. Relying on an NHAI circular dated 6 February 2016, which permits only a 5% tolerance in gross vehicle weight, the insurer contended that the excess load amounted to 11.48%, constituting a breach of the policy conditions and the provisions of the Motor Vehicles Act, 1988.

Observation and Decision:

The Commission observed that although the insured vehicle was overloaded at the time of the accident, the insurer had incorrectly calculated the extent of overloading by comparing the excess load with the vehicle's permissible payload instead of its gross vehicle weight. It held that the actual excess amounted to 6.42% of the gross vehicle weight, only marginally above the permissible 5% tolerance under the NHAI circular.

While holding that the vehicle was indeed overloaded, the Commission found that the insurer had failed to establish any direct nexus between the overloading and the cause of the accident. It reiterated the settled principle that a mere breach of a policy condition cannot justify repudiation of an insurance claim unless the breach is the proximate cause of the accident. Holding the insurer guilty of deficiency in service, the Commission, relying on the Supreme Court's decision in Amlendu Sahoo v. Oriental Insurance Co. Ltd., directed settlement of the claim on a non-standard basis after deducting 25% from the surveyor-assessed loss on account of overloading.

Accordingly, the Commission partly allowed the complaint and directed the insurer to pay ₹21,47,629 (after deducting 25% from the surveyor-assessed loss of ₹28,63,500), ₹10,52,397 as compensation for delay calculated at 6% per annum from 17 May 2018 to 15 July 2026, and ₹50,000 towards mental agony and litigation expenses, taking the total award to ₹32,50,026. The amount was directed to be paid within 30 days, failing which it would carry 6% interest per annum from 16 July 2026 until payment.

Adv. Sudesh Sharma (Counsel For The Complainant)

Adv. Diwakar Sharma (Counsel For The Opposite Parties)

Case Title: Ajab Singh V/S Iffco Tokio General Insurance Company.

Case No.: C.C. 4099 Of 2019

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