BHARTI AXA GENERAL INSURANCE CO. LTD. Vs. PRIYA PAUL
LAWS(SC)-2020-2-38
SUPREME COURT OF INDIA
Decided on February 07,2020

Bharti Axa General Insurance Co. Ltd. Appellant
VERSUS
Priya Paul Respondents




JUDGEMENT

MOHAN M.SHANTANAGOUDAR,J. - (1.)This appeal arises against the order of the National Consumer Disputes Redressal Commission (for short "National Commission") dated 22.05.2017 allowing the insurance claim filed by Respondent No. 1 pertaining to an aviation accident leading to the death of her son.
(2.)The brief facts leading to the instant appeal are as follows:
2.1 Respondent No. 1 had gone on vacation to Canada along with her family in June 2013. On 29.06.2013, the family visited the Pemberton Soaring Centre, a gliding facility at Pemberton in British Columbia. Her son took the first turn for a sightseeing flight on a twoseater glider plane (Stemme S10VT) flown by the pilot at the facility. While airborne, the glider exploded after colliding with a Cessna 150 aircraft, killing all occupants of both the glider and the Cessna. Respondent No. 1 filed a claim with the Appellant based on the SmartPersonal AccidentIndividual Insurance Policy ("the Policy") taken by the deceased. The claim was repudiated on the basis that the deceased was travelling in a motorized glider for sightseeing, and hence was not travelling in a standard aircraft, and was further not a farepaying passenger in any regular scheduled airline or air charter company, which excluded the accident from the purview of the Policy. We may refer to the relevant provisions of the Policy in this regard:

"7. General Exclusions of the Policy PROVIDED ALWAYS THAT the Company shall not be liable under this policy for ...

ix) Any claim in respect of accidental death or permanent disablement of the Insured/Insured Person: ...

iii) whilst engaging in aviation or ballooning whilst mounting into, dismounting from or traveling in any aircraft or balloon other than as a passenger (fare paying or otherwise) in any duly licensed standard type of aircraft anywhere in the world. ...

xiv) Insured/insured person whilst flying or taking part in aerial activities (including cabin crew) except as a farepaying passenger in a regular scheduled airline or air charter company."

2.2 A complaint was filed with the National Commission on 3.2.2015, which allowed the same, directing the insurer to pay an amount of Rs. 1 crore with interest at the rate of 8% per annum. The National Commission held that a glider was an "aircraft" under Section 2(1) of the Aircrafts Act, 1934 ("the 1934 Act") and had not been expressly excluded under the Policy, unlike activities like hanggliding and paragliding. Next, the National Commission held that the glider was a "duly licensed" aircraft, since the Pemberton Soaring Centre had a licence to conduct the business of sightseeing glider flights, and there was no evidence of a licence being required for individual aircraft under law apart from a private registration, which had been done for the glider in question, as evident from the aviation inspection report of the Transport Safety Board of Canada ("the TSBC Report"), which had also extensively referred to the glider as an "aircraft".

2.3 It was also held that the glider was a standard type of aircraft, placing the onus of bringing the case within an exclusionary clause on the insurer, who had failed to produce any certificate from the Canadian or Indian aviation authorities, or rule or regulation which defined a "standard" aircraft, in the absence of a contractual definition of the term, and particularly since it was noted in the TSBC report that the glider was certified, equipped, and maintained in accordance with existing regulations and approved procedures.

2.4 The Commission was also of the opinion that a person undertaking a round trip without a destination would also qualify as a passenger, and that the deceased was a farepaying passenger on a sightseeing flight, and had taken the aircraft on hire. Considering the definition of "charter" in the Black's Law Dictionary, which includes the hiring or leasing of a vessel such as an airplane, and the fact that charges were payable by the deceased for flying in the glider, the Commission also concluded that the plane was given out on hire by the Pemberton Soaring Company pursuant to its business, and it was an air charter company. The Commission declined from placing reliance on alleged correspondence with the attorney of the owner of the Pemberton Soaring Company confirming that the accident did not fall into the purview of the Policy, for being hearsay.

2.5 Aggrieved by this decision, the instant appeal was filed by the insurer.

(3.)Before us, learned Counsel appearing for the Appellantinsurer urged that the accident did not fall within the purview of the Policy for the following reasons:
3.1 Firstly, Counsel argued that the glider in question was not a standard aircraft, since it principally relied on aerodynamics to soar, whereas standard aircraft were powered. It was submitted that though the glider in question was equipped with an engine, this was solely for the purpose of takeoff and landing and did not change the "nonstandard" nature of the glider, especially when the TSBC Report itself noted that the glider was operating without power at the time of the accident. To buttress his argument, Counsel also referred to the definition of "glider" under the 1934 Act, and to the Glider Flying Handbook published by the United States Department of Transportation, Federal Aviation Administration. He also highlighted that the Pemberton Soaring Company had advertised itself as offering opportunities for undertaking nonpowered flight; the pilot himself had a separate licence for gliding; the Aircraft Rules, 1937 ("the 1937 Rules") distinguished between the licences for powerdriven and nonpower driven aircraft; and referred to alleged correspondence with Mr. Sean Taylor, the lawyer of Ms. Tracey Rozsypalek, the widow of the pilot and coowner and operator of the Pemberton Soaring Centre, affirming that the glider was not a standard aircraft. He submitted that the definition of "aircraft" under Section 2(1) of the 1934 Act, which included gliders and even balloons, could not be relied upon as it militated against the intention of the parties to the Policy to exclude such vessels from the meaning of "standard type of aircraft".

3.2 Secondly, it was contended that the glider was not duly licensed, since the licence relied upon by the National Commission was only a municipal business licence.

3.3 Thirdly, learned Counsel submitted that the National Commission wrongly ignored that a person undertaking a full circle flight could not be held to be a passenger.

3.4 Fourthly, he argued that the Pemberton Soaring Centre was not a regular scheduled airline or air charter company, again relying on the alleged correspondence with Mr. Taylor, a report dated 21.05.2018 by the Canadian investigator Diligence International Group ("Diligence") highlighting the absence of a charter licence for the Pemberton Soaring Centre, also placing a sample Canadian charter licence on record for illustration purposes. He also referred to an email dated 21.10.2013 from Ms. Rozsypalek enclosing the business licence of the Pemberton Soaring Centre, to argue that this suggested that the facility in fact had no other licence, particularly for air charter business.

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