Bharti Axa General Insurance Co. … vs Priya Paul on 7 February, 2020


Supreme Court of India

Bharti Axa General Insurance Co. … vs Priya Paul on 7 February, 2020

Author: 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”).

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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

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