caselaws.org
Supreme Court of India
Bharti Axa General Insurance Co. … vs Priya Paul on 7 February, 2020Author: Mohan M. Shantanagoudar
Bench: Mohan M. Shantanagoudar, R. Subhash Reddy
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 3346 OF 2018
Bharti AXA General Insurance Co. Ltd. ….Appellant(s)
Versus
Priya Paul & Anr. ….Respondent(s)
JUDGMENT
MOHAN M. SHANTANAGOUDAR, J.
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
Signature Not Verified
Digitally signed by
along with her family in June 2013. On 29.06.2013, the family
ASHWANI KUMAR
Date: 2020.02.07
14:33:32 IST
Reason:
visited the Pemberton Soaring Centre, a gliding facility at
1
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
2
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”.
3
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
4
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
5
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
6
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.
4. Learned Counsel for Respondent No. 1, on the other
hand, argued in favour of the decision of the National
Commission.
4.1 Firstly, he argued that the glider was a duly licensed
standard aircraft. He emphasised that a glider is classified as an
aircraft under the Aircraft Act; and that the failure to expressly
exclude gliding activity from the purview of the Policy, as was
done for hanggliding and paragliding, indicated an intention to
the include the same. He submitted that though the glider was
motorised, determining its status as a standard aircraft
depending on whether the engine was on or off during the flight
would unfairly lead to differential rules being applicable to the
same vessel at different times.
7
4.2 He also highlighted that as per the TSBC Report, the
glider, as well as the Cessna, were registered aircraft governed by
the same Canadian regulations, particularly the Visual Flight
Rules; the glider was privately registered, and was operated by a
duly licensed pilot; and the operator was running under a licence
to carry on the business of gliding. These were the only legal
requirements to be satisfied to carry on the activity of gliding as a
business lawfully. It was stressed that the TSBC Report found
that the aircraft was certified, equipped and maintained in
accordance with applicable rules, and no particular rule was
urged to show that the glider was not a standard aircraft. Any
such rule could in any case not have been in the possession of
the complainant, and thus the burden lay on the insurer to
produce the same.
4.3 Secondly, learned Counsel argued that the deceased
was a farepaying passenger at all times during the flight. He
submitted that the glider had been consistently described in the
records as having two seats, one for the pilot and one for the
passenger; the National Commission rightly held so disregarding
the fact that the journey was fullcircle; and that the widow Ms.
8
Rozsypalek had herself stated in her email dated 21.10.2013 that
the deceased was a farepaying passenger on the glider aircraft.
4.4 Thirdly, he contended that the Pemberton Soaring
Centre was an air charter company. To this end, he argued that
the term “charter” implied the hire or lease of a vehicle in its
entirety, which was being done by the facility while offering
gliders for sightseeing; the National Commission rightly rejected
evidence to the contrary from the purported attorney of the
Rozsypaleks as hearsay; and that the second report dated
21.05.2018 issued by Diligence for the Appellantinsurer was an
event subsequent to the filing of the complaint and decision of
the National Commission, and hence liable to be disregarded.
5. Heard the learned Counsel on either side and perused
the record.
6. We have already referred to the relevant exclusionary
clauses of the Policy, but would like to reproduce it again for the
purpose of convenience:
“7. General Exclusions of the Policy
PROVIDED ALWAYS THAT the Company shall not be
liable under this policy for
…
9
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.”
6.1 To better appreciate the arguments advanced by the
parties, it is also important to reproduce clause 7(xiii) of the
Policy:
“xiii) Insured/insured person whilst engaging in speed
contest or racing of any kind (other than on foot),
bungee jumping, parasailing, ballooning, parachuting,
skydiving, paragliding, hang gliding, mountain or rock
climbing necessitating the use or guides of ropes,
potholing, abseiling, deep sea diving using hard helmet
and breathing apparatus, polo, snow and ice sport.”
6.2 Clearly, Clause 7(ix)(iii) excludes accidental death or
permanent disablement suffered by the insured while mounting
into, dismounting from, or travelling in any aircraft or balloon,
while engaging in aviation or ballooning. However, the insurer
10
would be liable if the accident occurred while such activity was
being undertaken by the insured as a passenger of any aircraft or
balloon, whether fare paying or gratuitous, in a duly licensed,
standard type of aircraft anywhere in the world.
6.3 Clause 7(xiv), in comparison, is similarly worded as far
as its exclusion is concerned, inasmuch as it pertains to
accidental death or permanent disablement suffered by the
insured while flying or taking part in aerial activities. This clause
however contemplates that the accident would be included in the
ambit of the Policy if it occurred while the insured was travelling
as a farepaying passenger in a regular scheduled airline or air
charter company.
6.4 Clause 7 (xiii) excludes claims arising out of a wide
variety of adventure sports and activities that have been
specifically mentioned, such as bungee jumping, parasailing, and
ballooning. Notably, though activities such as paragliding and
hang gliding are included, gliding is not mentioned.
7. There is no dispute that the deceased was engaging in
the activity of gliding, which is an aviation/aerial activity which
would fall within the exclusion envisaged under Clauses 7(ix)(iii)
and 7(xiv) of the Policy. The impugned judgment would be liable
11
to be confirmed if we determine that the gliding activity in
question falls within the exemptions to the exclusions envisaged
under these two clauses, that is to say, the deceased was
travelling in a duly licensed standard type of aircraft, bringing
him out of the exclusion in Clause 7(ix)(iii), and that he was
travelling as a farepaying passenger in an air charter company
or regular scheduled airline, bringing him out of the scope of the
exclusion in Clause 7(xiv). Both these clauses must be satisfied in
order to evade exclusion from the Policy.
7.1 In view of the above, the questions before us for
determination are, firstly, whether the glider involved in the
accident was an aircraft; secondly, whether it was a standard
aircraft; thirdly, whether the aircraft was duly licensed; fourthly,
whether the Pemberton Soaring Centre was an air charter
company or regular schedule airline; and fifthly, whether the
deceased was travelling on the glider as a farepaying passenger.
The fourth question may be further limited to whether the
Pemberton Soaring Centre was an air charter company, since
Respondent No. 1 has not disputed that the Pemberton Soaring
Centre was not a regular scheduled airline.
12
8. On the question of whether the glider is an aircraft, we
must first refer to the definition of “aircraft” under Section 2(1) of
the 1934 Act:
“(1) “aircraft” means any machine which can derive
support in the atmosphere from reactions of the
air, other than reactions of the air against the earth’s
surface and includes balloons whether fixed or free,
airships, kites, gliders and flying machines” (emphasis
added).
8.1 Reference may also be made to the definition of
“aircraft” under Section 3(1) of the Aeronautics Act, 1985 of
Canada:
“(a) until the day on which paragraph (b) comes into
force, any machine capable of deriving support in the
atmosphere from reactions of the air, and includes a
rocket”; (aéronef)
(b) [Repealed before coming into force, 2008, c. 20, s.
3].”
8.2 Evidently, a glider is included in the definition of an
aircraft for the purposes of the relevant Indian and Canadian
statutes. Additionally, the definition of “glider” itself, under Rule
3(26) of the 1937 Rules, describes the same as an aircraft:
“(26) “Glider” means a nonpowerdriven heavierthan
air aircraft, deriving its lift in flight chiefly from
aerodynamic reactions on surfaces which remain fixed
under given conditions of flight” (emphasis added).
13
8.3 Similarly, under the Canadian Aviation Regulations
(SOR/96433), a glider is defined as “a nonpowerdriven heavier
thanair aircraft that derives its lift in flight from aerodynamic
reactions on surfaces that remain fixed during flight”.
8.4 Even the dictionary meanings of the term “aircraft” do
not make any exception for gliders. For instance, the Concise
Oxford Advanced Learner’s Dictionary defines an aircraft as “any
vehicle that can fly and carry goods or passengers”,1 while the
Cambridge Advanced Learner’s Dictionary defines it as “any
vehicle, with or without an engine, that can fly, such as a plane or
helicopter”.2 In turn, the former defines a “glider” as “a light
aircraft that flies without an engine”, while the latter defines it as
“an aircraft that has long fixed wings and no engine and flies by
gliding”.
8.5 It becomes important to note at this juncture that
though the glider in question was equipped with an engine, this
was mainly for the purpose of adding selflaunching capacity to
the vehicle, as evident from the TSBC Report. Be that as it may,
1 OXFORD ADVANCED LEARNER’S DICTIONARY (Oxford University Press, 9th
edition, 2015).
2 CAMBRIDGE ADVANCED LEARNER’S DICTIONARY (Cambridge University Press,
4th edition, 2013).
14
the fact that the glider was motorised would not imply that it was
not an aircraft at all. Even the TSBC Report unequivocally refers
to the glider as an “aircraft” repeatedly. Importantly, the terms
“aircraft” and “glider” have not been defined within the Policy. In
such circumstances, we are of the view that the glider in question
must be regarded as an aircraft under the Policy.
9. We may next address the question of whether the
glider in question was a standard type of aircraft. We begin by
noting that the Policy itself does not define what a “standard type
of aircraft” is, and we are at a loss to understand the context in
which the term has been employed in the Policy. Much of the
argument advanced by the learned Counsel for the Appellant to
distinguish between powerdriven and nonpower driven aircraft
as being standard and nonstandard relies upon common
parlance; however, apart from this submission, learned Counsel
has not been able to explain the exact meaning of the term
“standard type of aircraft”.
9.1 The nature of conventional gliders as not being power
driven has not been seriously disputed before us. Thus, we find it
unnecessary to refer to the extensive literature relied upon by the
Appellant to establish the mechanics of a glider’s flight. At the
15
same time, since the glider in question was a motorised glider,
being equipped with an engine for selflaunching capacity, it is
crucial to determine whether a distinction can be drawn between
“standard” and “nonstandard” aircraft on the basis of the nature
of power they run on, whether a glider can be termed as a “non
standard” aircraft merely on that basis, and whether a motorised
glider would therefore amount to a standard or nonstandard
aircraft.
9.2 It would be apt to refer to the 1937 Rules in order to
determine whether a distinction of the nature described above is
apparent therein. We would like to particularly refer to the
scheme of granting licences within the rules, since the Appellant
has sought to impress upon us that the 1937 Rules distinguish
between the licences for powerdriven and nonpower driven
aircraft, indicating that nonreliance on a motor engine for flying
may be the basis to conclude that gliders are “nonstandard”
aircraft.
9.3 As far as the grant of pilots’ licences are concerned, the
1937 Rules provide for different educational qualifications for
issuance of licences for aeroplanes, helicopters, gliders, balloons,
and microlight aircraft. For instance, as per Paragraph 1(e) of
16
Section E of Schedule II, the flying experience for a private pilot’s
licence for flying aeroplanes may be accumulated through the
completion of not less than forty hours of flight time as a pilot of
an aeroplane, which shall include:
“(i) not less than twenty hours of solo flight time;
(ii) not less than five hours of crosscountry flight
time in accordance with para 5(b) of Section A as
the sole occupant of an aeroplane including a
flight of not less than one hundred and fifty
nautical miles in the course of which full stop
landings at two different aerodromes shall have
been made;
(iii) not less than ten hours of solo flight time
completed within a period of twelve months
immediately preceding the date of application for
the issue of licence;
(iv) fifty percent of solo flying experience on
microlight aircraft acquired during the preceding
twenty four months from the date of application
subject to a maximum of ten hours, may be
credited towards the total experience required for
the issue of the licence;
(v) fifty percent of solo gliding experience shall count
towards total flying experience requirement
subject to a maximum of ten hours towards total
flight time.”
9.4 To take another instance, as per Paragraph 1 of
Section F, the flying experience required for a pilot’s licence for
flying microlight aircraft is completion of not less than forty
17
hours of flight time as a pilot of a microlight aircraft, which shall
include:
“(i) not less than fifteen hours of solo flight time of
which not less than ten hours shall have been
completed within a period of twelve months
immediately preceding the date of application for
the licence; and
(ii) not less than five hours of crosscountry flight
time as the solo occupant of microlight aircraft
including a flight over a distance of not less than
fifty nautical miles from the aerodrome of
departure and at least one full stop landing at a
suitable aerodrome or landing ground other than
the aerodrome of departure;
(iii) the holder of a current Private Pilot’s Licence
(Aeroplanes) or a higher category of Licence
(Aeroplanes) shall be exempted from the
experience requirements. Such pilots shall,
however, be required to carry out familiarisation
flights which shall be followed by not less than
three solo takeoffs and landings. The
familiarisation flights shall be carried out under
the supervision of an approved Examiner or a
Flight Instructor approved by the Director
General.”
9.5 On the other hand, the flying experience required for a
glider pilot’s licence under Paragraph 1(e) of Section I of Schedule
II is as follows:
“(i) not less than ten hours of flight time of which not
less than five hours shall be solo flight time; and
18
(ii) not less than seventy five takeoffs and landings
of which not less than twenty five solo takeoffs
and landings shall have been completed within a
period of six months immediately preceding the
date of application for licence.”
9.6 Thus, it is clear that no uniform requirement of flying
experience is prescribed for one set of aircraft as opposed to
another; on the other hand, different requirements are prescribed
for different types of aircraft.
9.7 Interestingly, there is a distinction maintained under
Rule 48 between the fees payable for student pilot’s licences and
glider licences on one hand and remaining licences on the other,
for the purpose of issuance, validation or renewal of licences. It is
also relevant to note that a common student licence is envisaged
for aeroplanes, helicopters and gliders, while separate student
licences are prescribed for microlight aircraft and balloons.
9.8 In our considered opinion, the above scheme shows
that the 1937 Rules do not maintain any uniform categorisation
between powered and nonpowered aircraft, far from terming any
of these as “standard” or “nonstandard”. It does not appear to be
the case that one set of rules is prescribed for powered aircraft,
and another distinct set for nonpowered aircraft. Thus, no
19
reliance can be placed on the Rules to further the Appellant’s
contention in this respect.
9.9 As far as the Canadian regime is concerned, no
particular statutory provision was brought to our attention in
this regard by either party. We may observe that the TSBC Report
notes that the pilot of the glider had a private pilot licence for
aeroplanes, valid for singleengine land aircraft, as well as a
separate glider pilot licence. However, this distinction per se does
not support the argument of the Appellant, since a brief perusal
of the Canadian Aviation Regulations (SOR/96433) reveals that
under the Canadian regime as well, a distinction of the nature
submitted by the Appellant has not been maintained. To take the
licence regime as an example again, the regulations provide for
several kinds of licences, which do not seem to be categorised on
the basis of the powered or nonpowered nature of the aircraft.
For instance, the regulations provide for airline transport
licences, commercial licences, and private pilot licences for
aeroplanes; airline transport licences, commercial licences, and
private pilot licences for helicopters; glider pilot licences; and
pilot permits for gyroplanes, ultralight aeroplanes, and so on.
20
9.10 From the above discussion, it is evident that no rigid
distinction can be culled out between “standard” and “non
standard” aircraft. Though the Appellant in this case submits
that this distinction can be drawn on the basis of whether the
aircraft is powerdriven or not, it can equally be argued that the
term “standard” aircraft connotes only aeroplanes, or only
aeroplanes and helicopters, or even includes microlight aircraft,
and so on. The usage of as vague a phrase as “standard type of
aircraft” in the Policy, thus, suggests to us that the same must be
construed in a liberal manner so as to benefit the insured. In this
regard, we may fruitfully quote the following observations of this
Court in United India Insurance Co. Ltd. v. Pushpalaya
Printers, (2004) 3 SCC 694:
“6. …It is also settled position in law that if there is
any ambiguity or a term is capable of two possible
interpretations, one beneficial to the insured should be
accepted consistent with the purpose for which the
policy is taken, namely, to cover the risk on the
happening of certain event. Although there is no
ambiguity in the expression “impact”, even otherwise
applying the rule of contra preferentem, the use of the
word “impact” in clause 5 in the instant policy must be
construed against the appellant. Where the words of a
document are ambiguous, they shall be construed
against the party who prepared the document. This
21
rule applies to contracts of insurance and clause 5 of
the insurance policy even after reading the entire
policy in the present case should be construed against
the insurer. A Constitution Bench of this Court in
General Assurance Society Ltd. v. Chandmull Jain [AIR
1966 SC 1644: (1966) 3 SCR 500] has expressed that
(AIR p. 1649, para 11)
“in a contract of insurance there is
requirement of uberrima fides i.e. good faith
on the part of the assured and the contract
is likely to be construed contra proferentem,
that is, against the company in case of
ambiguity or doubt”.”
9.11 In the instant case, we agree with the conclusion of the
National Commission that had the insurer really intended to
exclude gliding activity from the purview of the Policy, it could
have done so expressly, similar to the manner in which hang
gliding and paragliding were excluded in Clause 7(xiii) of the
Policy. Similarly, the insurer could have also defined the phrase
“standard type of aircraft” for the purpose of the Policy, but it
chose not to do so. In these circumstances, it is not open to the
insurer to reject a claim arising out of a glider accident by now
arguing that a glider is not a standard aircraft by virtue of not
principally being a powered aircraft. We are therefore compelled
to conclude that regardless of whether the glider involved in the
22
accident was powered or nonpowered, motorised or non
motorised, it was a “standard type of aircraft” envisioned in the
Policy.
10. We now turn our attention to the issue of whether the
glider in question was duly licensed. In this regard, it may be
noted that the National Commission specifically took note of the
Appellant’s submission that the licence produced before the
Commission was only a municipal business licence to be taken
necessarily by any businessowner seeking to conduct a business
in the municipal limits of Pemberton. The Commission went on to
find that there was no evidence of a licence being required in
respect of each aircraft/glider, and the private registration
undertaken with respect to the glider in question, in addition to
the municipal business licence, was sufficient compliance with
the requirement of the aircraft being duly licensed.
10.1 We find ourselves in agreement with the National
Commission in this regard. We have perused the business licence
on record, as well as the observation in the TSBC Report that the
the glider was registered privately, carrying registration as “C
FHAB”, with serial number 11016. We are moreover conscious of
the specific finding in the TSBC Report that the glider was
23
certified, equipped and maintained in accordance with existing
regulations and approved procedures, and compliant with rules
such as the Visual Flight Rules. The Report further observes that
even the pilot of the glider was certified and qualified for the flight
as per existing regulations, indicating that such separate glider
pilot licence was in accordance with the legal requirements.
Thus, we conclude that it was rightly held that the aircraft in
question was duly licensed.
11. The fourth issue to be determined is whether the
Pemberton Soaring Centre was an air charter company. In this
respect, we would first like to deal with the contention of the
Appellant that one Mr. Sean Taylor, the attorney of Ms. Tracy
Rozsypalek, the coowner of the Pemberton Soaring Centre (who
was also the widow of the deceased glider pilot, the other co
owner) had communicated to the insurance investigator Diligence
that the Pemberton Soaring Centre was not an air charter
company. We are of the view that the National Commission
rightly disregarded this communication, though spoken to by the
Managing Director of Diligence on affidavit, being hearsay
evidence in nature. No affidavit from Mr. Taylor himself was
placed on record, and indeed, there is nothing to show that he in
24
fact was the attorney of Ms. Rozsypalek. Thus, no reliance can be
placed on the alleged communication with Mr. Taylor.
11.1 The Appellant has also submitted the report dated
21.05.2018 of the investigator Diligence, containing certain
records such as communication with Canadian authorities, as
well as a database search of air carrier licences, to show that no
licence was possessed by the Pemberton Soaring Centre
authorising it to operate as an air charter company. The
Appellant also seeks to draw our attention to a sample licence of
a Canadian air charter company to argue that no such licence
was held by the Pemberton Soaring Centre. We are inclined to
disregard these records, as the investigation based on which
such records were collected was commissioned by the insurer
after the impugned decision of the National Commission dated
22.05.2017, and more so after Diligence had already submitted
an investigation report prior thereto. As per the second report
itself, the first report was submitted on 03.02.2014, and the
Appellant instructed Diligence to reopen investigation into the
case on 20.02.2018, four years later, specifically on the question
of whether the Pemberton Soaring Centre was an air charter
company or regular scheduled airline. In our considered opinion,
25
the information that the Appellant now seeks to rely upon could
easily have been obtained by it at the time of the first
investigation by Diligence, and could have been placed before the
National Commission. Particularly in view of the long lapse of
time before the second report was commissioned, we are of the
opinion that it is not open to the Appellant to place reliance upon
the same at this stage.
11.2 We are cognizant of the fact that the term “air charter
company” has not been defined within the policy, and the
National Commission, while concluding that the Pemberton
Soaring Centre was an air charter company, relied upon the
dictionary meaning of the word “charter”, which connotes the
hiring or lease of the entirety of a vessel. It appears that such
term is not defined within any Canadian or Indian regulation,
and indeed, no material has been placed on record regarding the
regulatory regime governing domestic chartered flights in India,
Canada, or any other jurisdiction. However, to throw light on the
scope of air charter services, we may refer to international
materials discussing the same, referring in particular to the
definitions adopted by the International Civil Aviation
Organisation (“the ICAO”).
26
11.3 Any discussion on charter flights must first begin by
differentiating between scheduled and nonscheduled flights. The
ICAO essentially defines scheduled flights as those which are
scheduled and performed as per a fixed timetable, or are so
regular and frequent so as to constitute a recognizably systematic
series, and are open to direct bookings by members of the
public.3
11.4 In contrast, nonscheduled services are described as
commercial air transport services performed as other than a
scheduled service.4 In the Manual on the Regulation of
International Air Transport, the ICAO defines a chartered flight as
a nonscheduled operation using a chartered aircraft. At the
same time, a charter is stated to be a contractual arrangement
between an air carrier and an entity hiring or leasing its aircraft.
Importantly, reference is made to the “singleentity charter” or
“own use charter”, which is described in the following terms:
“…the most basic and timeless type, the single
entity charter or ownuse charter, one chartered by
one entity (e.g. an individual, corporation, government)
3 Glossary of Terms adopted by the International Civil Aviation
Organisation, available at
https://www.icao.int/dataplus_archive/Documents/20130729/GLOSSARY.
doc.
4 International Civil Aviation Organisation, The Manual on the Regulation of
International Air Transport (Doc. 9626, 3rd edition, 2016).
27
solely for its own use for the carriage of passengers
and/or freight, with the cost borne solely by that entity
and not shared directly or indirectly by others.”
(emphasis added)
11.5 It is undisputed in the instant case that the glider in
question could seat only two persons. Thus, in offering
sightseeing services on a glider plane for a fixed consideration,
the Pemberton Soaring Centre gave out the entirety of the aircraft
on hire for the duration of the aerial journey, though one seat
was reserved for the pilot. In our considered opinion, this practice
may constitute an ownuse charter. Moreover, we note that there
is no dispute that the Pemberton Soaring Centre was an
incorporated company. Keeping in mind that the Appellant has
itself omitted to define what it means by an “air charter company”
in the Policy, we are again, for the purposes of the Policy, inclined
to extend the benefit of the ambiguity in the meaning of the term
to the claimant. Thus, we affirm the National Commission’s
finding that the Pemberton Soaring Centre was an air charter
company within the meaning of clause 7(xiv) of the Policy.
12. The last issue to be determined is whether the
deceased was a farepaying passenger on the glider in question.
We find no force in the Appellant’s contention that the deceased
28
was not a passenger merely because the journey was supposed to
begin and terminate at the same location; indeed, this contention
was duly dealt with and rejected by the National Commission.
Needless to say, the purpose of the journey was to fly over
various scenic spots, and after completion, the glider was to
return to a designated location, presumably from where it took
off. As noted by the National Commission, this would not be
dissimilar to how a sightseeing bus might originate and terminate
its journey at the same spot after passing by various places of
interest. We find it difficult to conclude that a person
undertaking such a journey would not amount to a “passenger”.
12.1 Further, it is evident from the record that the journey
on the glider was undertaken for a fixed consideration, though
the ticket for the same has not been placed on record. Thus, we
affirm the National Commission’s finding that the deceased was a
fare paying passenger on the glider in question.
13. In view of the above discussion, we find that the
accident out of which the instant claim arose was completely
covered under the ambit of the Policy, since the deceased was
travelling in a duly licensed standard type of aircraft, which
brings him out of the exclusion in Clause 7(ix)(iii), and was
29
travelling as a farepaying passenger in a flight of an air charter
company, bringing him out of the scope of the exclusion in
Clause 7(xiv). Thus, we find no reason to interfere with the
impugned judgment, which found that the Appellant wrongly
repudiated the claim filed by Respondent No. 1.
14. The instant appeal is therefore dismissed. Ordered
accordingly.
……..………………………………….J.
(MOHAN M. SHANTANAGOUDAR)
…………………………………………
J.
(R. SUBHASH REDDY)
NEW DELHI
FEBRUARY 07, 2020
30
Comments