Chandigarh – The State Consumer Disputes Redressal Commission, Punjab, has ruled that overloading a commercial vehicle at the time of an accident is not a sufficient ground for an insurance company to completely repudiate a claim. The Commission, comprising Justice Daya Chaudhary (President) and Ms. Simarjot Kaur (Member), set aside a District Commission order and directed the United India Insurance Company Limited to settle the claim on a non-standard basis by paying 75% of the assessed loss.
The appeal was filed by Baldev Singh Bhatti against a Malerkotla District Consumer Disputes Redressal Commission order dated June 13, 2024, which had dismissed his complaint. The District Commission had relegated the matter to a competent court, citing disputed questions of fact regarding the vehicle’s load.
Background of the Case
The appellant, Baldev Singh Bhatti, had insured his Tata Prima truck with United India Insurance Company for an insured declared value of ₹35,00,000 for the period from March 4, 2020, to March 3, 2021. On October 2, 2020, the truck was involved in a collision after a stray animal came in front of it, causing significant damage. The incident was reported to the Garshankar Police Station.
After Bhatti filed a claim, the insurance company appointed a surveyor who assessed the net loss at ₹5,15,000. However, on April 16, 2021, the company repudiated the claim, stating it was filed as “No Claim” because the “vehicle was overloaded @ 21% at the time of accident.”
Arguments of the Parties
The appellant argued before the State Commission that the District Commission’s dismissal, based on a 2:1 majority, was unjust. His counsel, Sh. Sparsh Chhibber, contended that the vehicle was carrying a load within the permissible limits, as evidenced by a tax invoice (Ex.C-9) showing a load of 300 CFT. He further argued that even if the vehicle were overloaded, the accident was caused by a stray animal and not the load, meaning there was no fundamental breach of the insurance contract. The appellant cited the Supreme Court judgment in B.V. Nagaraju V. M/s Oriental Insurance Co. Ltd. to support this point.
The respondent insurance company, represented by Sh. Ravinder Arora, maintained that the claim was rightly repudiated. The company stated that the vehicle’s gross weight was 31,000 kg, and at the time of the accident, it was carrying 500 cubic feet of crusher material, making it overloaded by 6,795 kg (21.9%). The company relied on a different invoice (Ex.OP/3) dated October 1, 2020, from M/s Bhinder Stone Crusher, which showed a load of 500 CFT. The insurer alleged that the invoice for 300 CFT submitted by the complainant was a forged document procured after the accident.
Commission’s Analysis and Decision
The State Commission, in its order dated August 6, 2025, first addressed the split decision at the District level and proceeded to adjudicate the matter based on the majority opinion as per Section 39(3) of the Consumer Protection Act, 2019.
The Commission noted the discrepancy between the two tax invoices (Ex.C-9 and Ex.OP/3) regarding the quantity of crusher material loaded in the vehicle. While acknowledging the dispute, the Commission held that the repudiation on the sole ground of overloading was contrary to established legal principles.
The judgment heavily relied on the Supreme Court’s decision in Ashok Kumar Vs. New India Assurance Co. Ltd., Civil Appeal No. 4758 of 2023. The Commission quoted the guidelines discussed in that judgment for settling claims on a non-standard basis. Specifically, it highlighted the provision for cases of overloading:
“(ii) Overloading of vehicles beyond licensed carrying capacity. – Pay claims not exceeding 75% of admissible claim.”
The Commission observed, “As per the aforesaid judgment, the case of the Complainant falls in description (ii) of the above mentioned table.” It also took note of the final surveyor’s report (Ex.OP/7) by Er. Rajesh Aggarwal, which had assessed the net loss at ₹5,15,000.
Concluding its analysis, the Commission held that the complainant was entitled to a settlement on a non-standard basis. The order stated, “it is held that the Complainant is entitled to a claim settlement on non-standard basis i.e. 75% of admissible claim of Rs.5,15,000/- in light of the aforesaid of Hon’ble Supreme Court.”
Consequently, the Commission partly allowed the appeal, setting aside the District Commission’s order dated June 13, 2024, and directed the insurance company to pay 75% of the assessed amount of ₹5,15,000 to the appellant.
