Shivaji Kesarkar, the owner of a Tempo Trax insured with The Oriental Insurance Company Ltd, met with an accident on his way to Chiplun. His vehicle rammed a tree and he, along with two others, died on the spot.But a Kolhapur District Forum's order, directing the insurance company to pay Shivaji's wife Ambutai Rs 1,77,700, along with Rs 10,000 for ``physical inconvenience'' and ``mental agony'' and Rs 500 by way of costs, has now been set aside by the Maharashtra Consumer Disputes Redressal Forum. The deceased, Shivaji, was carrying passengers not related to him on payment of fare, which was prohibited in the insurance policy. Thus, the commission has ruled, the company isn't liable to indemnify the insured.

Shivaji purchasedthe vehicle for Rs 2,15,418 on January 24, 1994, and insured it the same day after paying a premium of Rs Rs 5,153. The accident took place on May 19, 1994, and while Shivaji and two others died instantly, three persons suffered injuries. The vehicle was badly damaged.

Ambutai made a claim for the full value of the vehicle Rs 2,15,418 but it was turned down by Oriental. The company agreed to settle the claim on certain conditions, which included penalising the insured party. Rejecting this offer, Ambutai filed an application before Kolhapur District Forum, which ordered the company to pay the aforementioned amount. But Oriental's lawyer S R Singh challenged the Forum's order. State Commission president A A Halbe asked Ambutai to use the option provided by Oriental to settle the matter on a non-standard basis, ie., 50 per cent or the cash loss quantified at Rs 41,960 on execution of an idemnity bond that no claim would be made in respect of the injured or dead passengers.