Case Note & Summary
The case involves an appeal by Bharti AXA General Insurance Co. Ltd. against an order of the National Consumer Disputes Redressal Commission allowing an insurance claim filed by Priya Paul, the mother of the deceased. The deceased died in a glider accident in Canada on 29 June 2013 when the glider collided with a Cessna aircraft. The insurer repudiated the claim relying on exclusion clauses in the Smart Personal Accident Individual Insurance Policy, which excluded liability for aviation activities except when the insured is a fare-paying passenger in a duly licensed standard type of aircraft or in a regular scheduled airline or air charter company. The National Commission held that the glider was an aircraft under the Aircraft Act, 1934, was duly licensed and standard, and that the deceased was a fare-paying passenger in an air charter company. The Supreme Court upheld the National Commission's decision. The Court reasoned that the definition of 'aircraft' under Section 2(1) of the Aircraft Act includes gliders, and the policy did not expressly exclude gliders. The insurer failed to prove that the glider was not a standard aircraft or that it was not duly licensed. The Court also held that the deceased was a fare-paying passenger as he paid for the flight, and the Pemberton Soaring Centre was an air charter company as it hired out the glider. The appeal was dismissed, and the insurer was directed to pay the claim amount with interest.
Headnote
A) Insurance Law - Exclusion Clauses - Interpretation - Policy exclusion for aviation activities except as passenger in standard aircraft - Burden on insurer to prove exclusion applies - Held that exclusion clauses must be strictly construed against the insurer (Paras 6-7). B) Insurance Law - Standard Aircraft - Definition - Glider included within definition of 'aircraft' under Section 2(1) of Aircraft Act, 1934 - Policy did not expressly exclude gliders unlike hang-gliding or paragliding - Held that glider is a standard type of aircraft (Paras 8-10). C) Insurance Law - Fare-Paying Passenger - Sightseeing Flight - Deceased paid for flight on glider - Held that a person on a round trip without destination is a passenger; payment for flight establishes fare-paying status (Paras 11-12). D) Insurance Law - Air Charter Company - Definition - Pemberton Soaring Centre hired out glider for sightseeing - Held that hiring of entire aircraft constitutes charter; facility is an air charter company (Paras 13-14).
Issue of Consideration
Whether the death of the insured in a glider accident falls within the exclusion clauses of the insurance policy, specifically whether the glider is a 'duly licensed standard type of aircraft' and whether the deceased was a 'fare-paying passenger' in a 'regular scheduled airline or air charter company'.
Final Decision
Appeal dismissed. The order of the National Commission dated 22.05.2017 is upheld. The insurer is directed to pay the claim amount of Rs. 1 crore with interest at 8% per annum from the date of filing of the complaint until realization.
Law Points
- Interpretation of insurance policy exclusion clauses
- Burden of proof on insurer for exclusionary clauses
- Definition of aircraft under Aircraft Act
- 1934
- Meaning of standard type of aircraft
- Status of glider as aircraft
- Fare-paying passenger in sightseeing flight
- Air charter company definition
