BHARTI AXA GENERAL INSURANCE CO. LTD. versus PRIYA PAUL & ANR. on 7 February 2020

1. It becomes important to note that though the glider inquestion was equipped with an engine, this was mainly for thepurpose of adding self-launching capacity to the vehicle, asevident from the Transport Safety Board of Canada (TSBC)EReport. Be that as it may, the fact that the glider was motorisedwould not imply that it was not an aircraft at all. Even the TSBCReport unequivocally refers to the glider as an “aircraft”repeatedly. Importantly, the terms “aircraft” and “glider” havenot been defined within the Policy. In such circumstances, thisFCourt is of the view that the glider in question must be regardedas an aircraft under the Policy. [Para 8.5][594-D-E]Whether the glider in question was a standard type ofaircraft.

2. The 1937 Rules do not maintain any uniformGcategorisation between powered and non-powered aircraft, farfrom terming any of these as “standard” or “non-standard”. Itdoes not appear to be the case that one set of rules is prescribedfor powered aircraft, and another distinct set for non-poweredaircraft. Thus, no reliance can be placed on the Rules to furtherthe Appellant’s contention in this respect. [Para 9.8][597-B-C]H

BHARTI AXA GENERAL INSURANCE CO. LTD. v.PRIYA PAUL & ANR.

3. In the instant case, this Court agrees with the conclusionof the National Commission that had the insurer really intendedto exclude gliding activity from the purview of the Policy, it couldhave done so expressly, similar to the manner in which hang-gliding and para-gliding were excluded in Clause 7(xiii) of thePolicy. Similarly, the insurer could have also defined the phrase“standard type of aircraft” for the purpose of the Policy, but itchose not to do so. In these circumstances, it is not open to theinsurer to reject a claim arising out of a glider accident by nowarguing that a glider is not a standard aircraft by virtue of notprincipally being a powered aircraft. Therefore, regardless ofwhether the glider involved in the accident was powered or non-powered, motorised or non-motorised, it was a “standard type ofaircraft” envisioned in the Policy. [Para 9.11][599-F-G]

Whether the glider in question was duly licensed.

4. On perusal of the business licence on record, as well asthe observation in the TSBC Report that the glider was registeredprivately, carrying registration as “C-FHAB”, with serial number11-016. Moreover, there is the specific finding in the TSBCReport that the glider was certified, equipped and maintained inaccordance with existing regulations and approved procedures,and compliant with rules such as the Visual Flight Rules. TheReport further observes that even the pilot of the glider wascertified and qualified for the flight as per existing regulations,indicating that such separate glider pilot licence was in accordancewith the legal requirements. Thus, it was rightly held by theNational Commission that the aircraft in question was dulylicensed. [Para 10.1][599-C-D]

Whether the Pemberton Soaring Centre was an air chartercompany.

5. In the Manual on the Regulation of International AirTransport, the ICAO defines a chartered flight as a non-scheduledoperation using a chartered aircraft. At the same time, a charteris stated to be a contractual arrangement between an air carrierand an entity hiring or leasing its aircraft. Importantly, referenceis made to the “single-entity charter” or “own use charter”.[Para 11.4][601-A-B]

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A6. It is undisputed in the instant case that the glider inquestion could seat only two persons. Thus, in offering sightseeingservices on a glider plane for a fixed consideration, the PembertonSoaring Centre gave out the entirety of the aircraft on hire forthe duration of the aerial journey, though one seat was reservedfor the pilot. This practice may constitute an own-use charter.BMoreover, there is no dispute that the Pemberton Soaring Centrewas an incorporated company. Keeping in mind that the Appellanthas itself omitted to define what it means by an “air chartercompany” in the Policy, this Court is again, for the purposes ofthe Policy, inclined to extend the benefit of the ambiguity in theCmeaning of the term to the claimant. Thus, this Court affirms theNational Commission’s finding that the Pemberton Soaring Centrewas an air charter company within the meaning of clause 7(xiv) ofthe Policy. [Para 11.5][601-D-F]

Whether the deceased was a fare-paying passenger on theDglider in question.

Whether the deceased was a fare-paying passenger on theDglider in question.

7. This Court finds no force in the Appellant’s contentionthat the deceased was not a passenger merely because thejourney was supposed to begin and terminate at the same location;indeed, this contention was duly dealt with and rejected by theENational Commission. Needless to say, the purpose of the journeywas to fly over various scenic spots, and after completion, theglider was to return to a designated location, presumably fromwhere it took off. As noted by the National Commission, this wouldnot be dissimilar to how a sightseeing bus might originate andterminate its journey at the same spot after passing by variousFplaces of interest. This Court finds it difficult to conclude that aperson undertaking such a journey would not amount to a“passenger”. [Para 12][601-G; 602-A-B]

United India Insurance Co. Ltd. v. Pushpalaya Printers,(2004) 3 SCC 694 : [2004] 2 SCR 631 – relied on.

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Case Law Reference

[2004] 2 SCR 631

relied on

Para 9.10

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CIVIL APPELLATE JURISDICTION: Civil Appeal No. 3346of 2018.

From the Judgment and Order dated 22.05.2017 of the NationalConsumer Disputes Redressal Commission, New Delhi in ConsumerComplaint No. 79 of 2015.

Joy Basu, Sr. Adv., Navneet Kumar, Kanak Bose, Vikas Bandana,Mohit Singh, Parijat Kishore, Advs. for the Appellant.

Gaurav Mitra, Vaibhav Mishra, Ms. Aditi Gupta, AmbarQamaruddin, Advs. for the Respondents.

The Judgment of the Court was delivered by MOHAN M. SHANTANAGOUDAR, J.

1. This appeal arises against the order of the National ConsumerDisputes Redressal Commission (for short “National Commission”) dated22.05.2017 allowing the insurance claim filed by Respondent No. 1pertaining 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 withher family in June 2013. On 29.06.2013, the family visited the PembertonSoaring Centre, a gliding facility at Pemberton in British Columbia. Herson took the first turn for a sightseeing flight on a two-seater glider plane(Stemme S10-VT) flown by the pilot at the facility. While airborne, theglider exploded after colliding with a Cessna 150 aircraft, killing alloccupants of both the glider and the Cessna. Respondent No. 1 filed aclaim with the Appellant based on the Smart-Personal Accident-IndividualInsurance Policy (“the Policy”) taken by the deceased. The claim wasrepudiated on the basis that the deceased was travelling in a motorizedglider for sightseeing, and hence was not travelling in a standard aircraft,and was further not a fare-paying passenger in any regular scheduledairline or air charter company, which excluded the accident from thepurview of the Policy. We may refer to the relevant provisions of thePolicy in this regard:

“7. General Exclusions of the Policy

PROVIDED ALWAYS THAT the Company shall not be liableunder this policy for- …

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Aix) Any claim in respect of accidental death or permanentdisablement of the Insured/Insured Person:

…

iii) whilst engaging in aviation or ballooning whilst mountinginto, dismounting from or traveling in any aircraft or balloon otherBthan as a passenger (fare paying or otherwise) in any duly licensedstandard type of aircraft anywhere in the world.

…

xiv) Insured/insured person whilst flying or taking part in aerialCactivities (including cabin crew) except as a fare-paying passengerin a regular scheduled airline or air charter company.”

2.2 A complaint was filed with the National Commission on3.2.2015, which allowed the same, directing the insurer to pay an amountof Rs. 1 crore with interest at the rate of 8% per annum. The NationalDCommission held that a glider was an “aircraft” under Section 2(1) ofthe Aircrafts Act, 1934 (“the 1934 Act”) and had not been expresslyexcluded under the Policy, unlike activities like hang-gliding andparagliding. Next, the National Commission held that the glider was a“duly licensed” aircraft, since the Pemberton Soaring Centre had a licenceto conduct the business of sightseeing glider flights, and there was noEevidence of a licence being required for individual aircraft under lawapart from a private registration, which had been done for the glider inquestion, as evident from the aviation inspection report of the TransportSafety Board of Canada (“the TSBC Report”), which had also extensivelyreferred to the glider as an “aircraft”.F

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 onthe insurer, who had failed to produce any certificate from the Canadianor Indian aviation authorities, or rule or regulation which defined a“standard” aircraft, in the absence of a contractual definition of the term,Gand particularly since it was noted in the TSBC report that the gliderwas certified, equipped, and maintained in accordance with existingregulations and approved procedures.

2.4 The Commission was also of the opinion that a personundertaking a round trip without a destination would also qualify as a H

passenger, and that the deceased was a fare-paying passenger on asightseeing flight, and had taken the aircraft on hire. Considering thedefinition of “charter” in the Black’s Law Dictionary, which includes thehiring or leasing of a vessel such as an airplane, and the fact that chargeswere payable by the deceased for flying in the glider, the Commissionalso concluded that the plane was given out on hire by the PembertonSoaring Company pursuant to its business, and it was an air chartercompany. The Commission declined from placing reliance on allegedcorrespondence with the attorney of the owner of the Pemberton SoaringCompany confirming that the accident did not fall into the purview of thePolicy, for being hearsay.

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

3. Before us, learned Counsel appearing for the Appellant-insurerurged that the accident did not fall within the purview of the Policy forthe following reasons:

3.1 Firstly, Counsel argued that the glider in question was not astandard aircraft, since it principally relied on aerodynamics to soar,whereas standard aircraft were powered. It was submitted that thoughthe glider in question was equipped with an engine, this was solely forthe purpose of take-off and landing and did not change the “non-standard”nature of the glider, especially when the TSBC Report itself noted thatthe glider was operating without power at the time of the accident. Tobuttress his argument, Counsel also referred to the definition of “glider”under the 1934 Act, and to the Glider Flying Handbook published by theUnited States Department of Transportation, Federal AviationAdministration. He also highlighted that the Pemberton Soaring Companyhad advertised itself as offering opportunities for undertaking non-poweredflight; the pilot himself had a separate licence for gliding; the AircraftRules, 1937 (“the 1937 Rules”) distinguished between the licences forpower-driven and non-power driven aircraft; and referred to allegedcorrespondence with Mr. Sean Taylor, the lawyer of Ms. TraceyRozsypalek, the widow of the pilot and co-owner and operator of thePemberton Soaring Centre, affirming that the glider was not a standardaircraft. He submitted that the definition of “aircraft” under Section 2(1)of the 1934 Act, which included gliders and even balloons, could not berelied upon as it militated against the intention of the parties to the Policyto exclude such vessels from the meaning of “standard type of aircraft”.

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

3.3 Thirdly, learned Counsel submitted that the NationalCommission wrongly ignored that a person undertaking a full-circle flightBcould not be held to be a passenger.

3.4 Fourthly, he argued that the Pemberton Soaring Centre wasnot a regular scheduled airline or air charter company, again relying onthe alleged correspondence with Mr. Taylor, a report dated 21.05.2018by the Canadian investigator Diligence International Group (“Diligence”)Chighlighting the absence of a charter licence for the Pemberton SoaringCentre, also placing a sample Canadian charter licence on record forillustration purposes. He also referred to an email dated 21.10.2013 fromMs. Rozsypalek enclosing the business licence of the Pemberton SoaringCentre, to argue that this suggested that the facility in fact had no otherlicence, particularly for air charter business.D4. 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 standardaircraft. He emphasised that a glider is classified as an aircraft underEthe Aircraft Act; and that the failure to expressly exclude gliding activityfrom the purview of the Policy, as was done for hang-gliding and para-gliding, indicated an intention to the include the same. He submitted thatthough the glider was motorised, determining its status as a standardaircraft depending on whether the engine was on or off during the flightwould unfairly lead to differential rules being applicable to the sameFvessel at different times.

4.2 He also highlighted that as per the TSBC Report, the glider, aswell as the Cessna, were registered aircraft governed by the sameCanadian regulations, particularly the Visual Flight Rules; the glider wasprivately registered, and was operated by a duly licensed pilot; and theGoperator was running under a licence to carry on the business of gliding.These were the only legal requirements to be satisfied to carry on theactivity of gliding as a business lawfully. It was stressed that the TSBCReport found that the aircraft was certified, equipped and maintained inaccordance with applicable rules, and no particular rule was urged toshow that the glider was not a standard aircraft. Any such rule could inH

any case not have been in the possession of the complainant, and thusthe burden lay on the insurer to produce the same.

4.3 Secondly, learned Counsel argued that the deceased was afare-paying passenger at all times during the flight. He submitted thatthe glider had been consistently described in the records as having twoseats, one for the pilot and one for the passenger; the National Commissionrightly held so disregarding the fact that the journey was full-circle; andthat the widow Ms. Rozsypalek had herself stated in her email dated21.10.2013 that the deceased was a fare-paying passenger on the glideraircraft.

4.4 Thirdly, he contended that the Pemberton Soaring Centre wasan 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 doneby the facility while offering gliders for sightseeing; the NationalCommission rightly rejected evidence to the contrary from the purportedattorney of the Rozsypaleks as hearsay; and that the second report dated21.05.2018 issued by Diligence for the Appellant-insurer was an eventsubsequent to the filing of the complaint and decision of the NationalCommission, 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 clausesof the Policy, but would like to reproduce it again for the purpose ofconvenience:

“7. General Exclusions of the Policy

PROVIDED ALWAYS THAT the Company shall not be liableunder this policy for- …

ix) Any claim in respect of accidental death or permanentdisablement 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 thanas a passenger (fare paying or otherwise) in any duly licensedstandard type of aircraft anywhere in the world.

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Axiv) Insured/insured person whilst flying or taking part in aerialactivities (including cabin crew) except as a fare-paying passengerin a regular scheduled airline or air charter company.”

6.1 To better appreciate the arguments advanced by the parties, itis also important to reproduce clause 7(xiii) of the Policy:B“

“xiii) Insured/insured person whilst engaging in speed contest orracing 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 breathingCapparatus, polo, snow and ice sport.”

6.2 Clearly, Clause 7(ix)(iii) excludes accidental death or permanentdisablement suffered by the insured while mounting into, dismountingfrom, or travelling in any aircraft or balloon, while engaging in aviation orballooning. However, the insurer would be liable if the accident occurredDwhile such activity was being undertaken by the insured as a passengerof any aircraft or balloon, whether fare paying or gratuitous, in a dulylicensed, standard type of aircraft anywhere in the world.

6.3 Clause 7(xiv), in comparison, is similarly worded as far as itsexclusion is concerned, inasmuch as it pertains to accidental death orEpermanent disablement suffered by the insured while flying or takingpart in aerial activities. This clause however contemplates that theaccident would be included in the ambit of the Policy if it occurred whilethe insured was travelling as a fare-paying passenger in a regularscheduled airline or air charter company.

F6.4 Clause 7 (xiii) excludes claims arising out of a wide variety ofadventure sports and activities that have been specifically mentioned,such as bungee jumping, parasailing, and ballooning. Notably, thoughactivities such as paragliding and hang gliding are included, gliding is notmentioned.

7. There is no dispute that the deceased was engaging in theGactivity of gliding, which is an aviation/aerial activity which would fallwithin the exclusion envisaged under Clauses 7(ix)(iii) and 7(xiv) of thePolicy. The impugned judgment would be liable to be confirmed if wedetermine that the gliding activity in question falls within the exemptionsto the exclusions envisaged under these two clauses, that is to say, theHdeceased was travelling in a duly licensed standard type of aircraft, bringing him out of the exclusion in Clause 7(ix)(iii), and that he wastravelling as a fare-paying passenger in an air charter company or regularscheduled airline, bringing him out of the scope of the exclusion in Clause7(xiv). Both these clauses must be satisfied in order to evade exclusionfrom the Policy.

7.1 In view of the above, the questions before us for determinationare, firstly, whether the glider involved in the accident was an aircraft;secondly, whether it was a standard aircraft; thirdly, whether the aircraftwas duly licensed; fourthly, whether the Pemberton Soaring Centre wasan air charter company or regular schedule airline; and fifthly, whetherthe deceased was travelling on the glider as a fare-paying passenger.The fourth question may be further limited to whether the PembertonSoaring Centre was an air charter company, since Respondent No. 1has not disputed that the Pemberton Soaring Centre was not a regularscheduled airline.

8. On the question of whether the glider is an aircraft, we mustfirst refer to the definition of “aircraft” under Section 2(1) of the 1934Act:

“(1) “aircraft” means any machine which can derive support inthe atmosphere from reactions of the air, other than reactions ofthe air against the earth’s surface and includes balloons whetherfixed or free, airships, kites, gliders and flying machines” (emphasisadded).

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, anymachine capable of deriving support in the atmosphere fromreactions 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 forthe 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 non-power-driven heavier-than-airaircraft, deriving its lift in flight chiefly from aerodynamic reactionson surfaces which remain fixed under given conditions of flight”(emphasis added).

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A8.3 Similarly, under the Canadian Aviation Regulations (SOR/96-433), a glider is defined as “a non-power-driven heavier-than-airaircraft that derives its lift in flight from aerodynamic reactions onsurfaces that remain fixed during flight”.

8.4 Even the dictionary meanings of the term “aircraft” do notBmake any exception for gliders. For instance, the Concise OxfordAdvanced Learner’s Dictionary defines an aircraft as “any vehicle thatcan fly and carry goods or passengers”,[1] while the CambridgeAdvanced Learner’s Dictionary defines it as “any vehicle, with orwithout an engine, that can fly, such as a plane or helicopter”.[2] Inturn, the former defines a “glider” as “a light aircraft that flies withoutCan engine”, while the latter defines it as “an aircraft that has longfixed wings and no engine and flies by gliding”.

8.5 It becomes important to note at this juncture that though theglider in question was equipped with an engine, this was mainly for thepurpose of adding self-launching capacity to the vehicle, as evident fromDthe TSBC Report. Be that as it may, the fact that the glider was motorisedwould not imply that it was not an aircraft at all. Even the TSBC Reportunequivocally 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 questionEmust be regarded as an aircraft under the Policy.

9. We may next address the question of whether the glider inquestion was a standard type of aircraft. We begin by noting that thePolicy itself does not define what a “standard type of aircraft” is, andwe are at a loss to understand the context in which the term has beenFemployed in the Policy. Much of the argument advanced by the learnedCounsel for the Appellant to distinguish between power-driven and non-power driven aircraft as being standard and non-standard relies uponcommon parlance; however, apart from this submission, learned Counselhas not been able to explain the exact meaning of the term “standardtype of aircraft”.G

9.1 The nature of conventional gliders as not being power-drivenhas not been seriously disputed before us. Thus, we find it unnecessary 1 OXFORD ADVANCED LEARNER’S DICTIONARY (Oxford University Press, 9th edition, 2015).2 CAMBRIDGE ADVANCED LEARNER’S DICTIONARY (Cambridge University Press, 4th edition,H2013).

to refer to the extensive literature relied upon by the Appellant to establishthe mechanics of a glider’s flight. At the same time, since the glider inquestion was a motorised glider, being equipped with an engine for self-launching capacity, it is crucial to determine whether a distinction can bedrawn between “standard” and “non-standard” aircraft on the basis ofthe nature of power they run on, whether a glider can be termed as a“non-standard” aircraft merely on that basis, and whether a motorisedglider would therefore amount to a standard or non-standard aircraft.

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9.2 It would be apt to refer to the 1937 Rules in order to determinewhether a distinction of the nature described above is apparent therein.We would like to particularly refer to the scheme of granting licenceswithin the rules, since the Appellant has sought to impress upon us thatthe 1937 Rules distinguish between the licences for power-driven andnon-power driven aircraft, indicating that non-reliance on a motor enginefor flying may be the basis to conclude that gliders are “non-standard”aircraft.

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9.3 As far as the grant of pilots’ licences are concerned, the 1937Rules provide for different educational qualifications for issuance oflicences for aeroplanes, helicopters, gliders, balloons, and microlightaircraft. For instance, as per Paragraph 1(e) of Section E of ScheduleII, the flying experience for a private pilot’s licence for flying aeroplanesmay be accumulated through the completion of not less than forty hoursof flight time as a pilot of an aeroplane, which shall include:

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“(i)not less than twenty hours of solo flight time;

(ii) not less than five hours of cross-country flight time inaccordance with para 5(b) of Section A as the sole occupantof an aeroplane including a flight of not less than onehundred and fifty nautical miles in the course of which fullstop landings at two different aerodromes shall have beenmade; F

(iii) not less than ten hours of solo flight time completed withina period of twelve months immediately preceding the dateGof application for the issue of licence;

(iv) fifty percent of solo flying experience on microlight aircraftacquired during the preceding twenty four months from thedate of application subject to a maximum of ten hours, maybe credited towards the total experience required for theHissue of the licence; A(v)fifty percent of solo gliding experience shall count towardstotal flying experience requirement subject to a maximumof ten hours towards total flight time.”

9.4 To take another instance, as per Paragraph 1 of Section F, theflying experience required for a pilot’s licence for flying microlight aircraftBis completion of not less than forty hours of flight time as a pilot of amicrolight aircraft, which shall include:

“(i) not less than fifteen hours of solo flight time of which not lessthan ten hours shall have been completed within a period of twelvemonths immediately preceding the date of application for theClicence; and

(ii) not less than five hours of cross-country flight time as the solooccupant of microlight aircraft including a flight over a distanceof not less than fifty nautical miles from the aerodrome ofdeparture and at least one full stop landing at a suitable aerodromeDor 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 exemptedfrom the experience requirements. Such pilots shall, however, berequired to carry out familiarisation flights which shall be followedEby not less than three solo take-offs and landings. Thefamiliarisation flights shall be carried out under the supervision ofan approved Examiner or a Flight Instructor approved by theDirector-General.”

9.5 On the other hand, the flying experience required for a gliderFpilot’s licence under Paragraph 1(e) of Section I of Schedule II is asfollows:

“(i)not less than ten hours of flight time of which not less thanfive hours shall be solo flight time; and

(ii) not less than seventy five take-offs and landings of whichGnot less than twenty five solo take-offs and landings shallhave been completed within a period of six monthsimmediately preceding the date of application for licence.”

9.6 Thus, it is clear that no uniform requirement of flyingexperience is prescribed for one set of aircraft as opposed to another;Hon the other hand, different requirements are prescribed for differenttypes of aircraft.

9.7 Interestingly, there is a distinction maintained under Rule 48between the fees payable for student pilot’s licences and glider licenceson one hand and remaining licences on the other, for the purpose ofissuance, validation or renewal of licences. It is also relevant to note thata common student licence is envisaged for aeroplanes, helicopters andgliders, while separate student licences are prescribed for microlightaircraft and balloons.

9.8 In our considered opinion, the above scheme shows that the1937 Rules do not maintain any uniform categorisation between poweredand non-powered aircraft, far from terming any of these as “standard”or “non-standard”. It does not appear to be the case that one set of rulesis prescribed for powered aircraft, and another distinct set for non-powered aircraft. Thus, no reliance can be placed on the Rules to furtherthe Appellant’s contention in this respect.

9.9 As far as the Canadian regime is concerned, no particularstatutory provision was brought to our attention in this regard by eitherparty. We may observe that the TSBC Report notes that the pilot of theglider had a private pilot licence for aeroplanes, valid for single-engineland aircraft, as well as a separate glider pilot licence. However, thisdistinction per se does not support the argument of the Appellant, sincea brief perusal of the Canadian Aviation Regulations (SOR/96-433)reveals that under the Canadian regime as well, a distinction of the naturesubmitted by the Appellant has not been maintained. To take the licenceregime as an example again, the regulations provide for several kinds oflicences, which do not seem to be categorised on the basis of the poweredor non-powered nature of the aircraft. For instance, the regulationsprovide for airline transport licences, commercial licences, and privatepilot licences for aeroplanes; airline transport licences, commerciallicences, and private pilot licences for helicopters; glider pilot licences;and pilot permits for gyroplanes, ultra-light aeroplanes, and so on.

9.10 From the above discussion, it is evident that no rigid distinctioncan be culled out between “standard” and “non-standard” aircraft.Though the Appellant in this case submits that this distinction can bedrawn on the basis of whether the aircraft is power-driven or not, it canequally be argued that the term “standard” aircraft connotes onlyaeroplanes, or only aeroplanes and helicopters, or even includes microlightaircraft, and so on. The usage of as vague a phrase as “standard typeof aircraft” in the Policy, thus, suggests to us that the same must be AB

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Aconstrued in a liberal manner so as to benefit the insured. In this regard,we may fruitfully quote the following observations of this Court in UnitedIndia Insurance Co. Ltd. v. Pushpalaya Printers, (2004) 3 SCC 694:

“6. …It is also settled position in law that if there is any ambiguityor a term is capable of two possible interpretations, one beneficialBto the insured should be accepted consistent with the purpose forwhich the policy is taken, namely, to cover the risk on the happeningof 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 mustbe construed against the appellant. Where the words of aCdocument are ambiguous, they shall be construed against the partywho prepared the document. This rule applies to contracts ofinsurance and clause 5 of the insurance policy even after readingthe entire policy in the present case should be construed againstthe insurer. A Constitution Bench of this Court in GeneralDAssurance 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 uberrimafides i.e. good faith on the part of the assured and the contractis likely to be construed contra proferentem, that is, against theEcompany in case of ambiguity or doubt”.”

9.11 In the instant case, we agree with the conclusion of theNational Commission that had the insurer really intended to exclude glidingactivity from the purview of the Policy, it could have done so expressly,similar to the manner in which hang-gliding and para-gliding wereFexcluded in Clause 7(xiii) of the Policy. Similarly, the insurer could havealso defined the phrase “standard type of aircraft” for the purpose ofthe Policy, but it chose not to do so. In these circumstances, it is not opento the insurer to reject a claim arising out of a glider accident by nowarguing that a glider is not a standard aircraft by virtue of not principallybeing a powered aircraft. We are therefore compelled to conclude thatGregardless of whether the glider involved in the accident was poweredor non-powered, motorised or non-motorised, it was a “standard typeof aircraft” envisioned in the Policy.

10. We now turn our attention to the issue of whether the glider inquestion was duly licensed. In this regard, it may be noted that the NationalH

Commission specifically took note of the Appellant’s submission that thelicence produced before the Commission was only a municipal businesslicence to be taken necessarily by any business-owner seeking to conducta business in the municipal limits of Pemberton. The Commission wenton to find that there was no evidence of a licence being required inrespect of each aircraft/glider, and the private registration undertakenwith respect to the glider in question, in addition to the municipal businesslicence, was sufficient compliance with the requirement of the aircraftbeing duly licensed.

10.1 We find ourselves in agreement with the National Commissionin this regard. We have perused the business licence on record, as wellas the observation in the TSBC Report that the the glider was registeredprivately, carrying registration as “C-FHAB”, with serial number 11-016. We are moreover conscious of the specific finding in the TSBCReport that the glider was certified, equipped and maintained inaccordance with existing regulations and approved procedures, andcompliant with rules such as the Visual Flight Rules. The Report furtherobserves that even the pilot of the glider was certified and qualified forthe flight as per existing regulations, indicating that such separate gliderpilot licence was in accordance with the legal requirements. Thus, weconclude that it was rightly held that the aircraft in question was dulylicensed.

11. The fourth issue to be determined is whether the PembertonSoaring Centre was an air charter company. In this respect, we wouldfirst like to deal with the contention of the Appellant that one Mr. SeanTaylor, the attorney of Ms. Tracy Rozsypalek, the co-owner of thePemberton Soaring Centre (who was also the widow of the deceasedglider pilot, the other co-owner) had communicated to the insuranceinvestigator Diligence that the Pemberton Soaring Centre was not an aircharter company. We are of the view that the National Commissionrightly disregarded this communication, though spoken to by the ManagingDirector of Diligence on affidavit, being hearsay evidence in nature. Noaffidavit from Mr. Taylor himself was placed on record, and indeed,there is nothing to show that he in fact was the attorney ofMs. Rozsypalek. Thus, no reliance can be placed on the allegedcommunication with Mr. Taylor.

11.1 The Appellant has also submitted the report dated 21.05.2018of the investigator Diligence, containing certain records such as AB

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Acommunication with Canadian authorities, as well as a database searchof air carrier licences, to show that no licence was possessed by thePemberton Soaring Centre authorising it to operate as an air chartercompany. The Appellant also seeks to draw our attention to a samplelicence of a Canadian air charter company to argue that no such licencewas held by the Pemberton Soaring Centre. We are inclined to disregardBthese records, as the investigation based on which such records werecollected was commissioned by the insurer after the impugned decisionof the National Commission dated 22.05.2017, and more so afterDiligence had already submitted an investigation report prior thereto. Asper the second report itself, the first report was submitted on 03.02.2014,Cand the Appellant instructed Diligence to re-open investigation into thecase on 20.02.2018, four years later, specifically on the question ofwhether the Pemberton Soaring Centre was an air charter company orregular scheduled airline. In our considered opinion, the information thatthe Appellant now seeks to rely upon could easily have been obtained byit at the time of the first investigation by Diligence, and could have beenDplaced before the National Commission. Particularly in view of the longlapse of time before the second report was commissioned, we are of theopinion that it is not open to the Appellant to place reliance upon thesame at this stage.

11.2 We are cognizant of the fact that the term “air charterEcompany” has not been defined within the policy, and the NationalCommission, while concluding that the Pemberton Soaring Centre wasan 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 Indianregulation, and indeed, no material has been placed on record regardingFthe regulatory regime governing domestic chartered flights in India,Canada, or any other jurisdiction. However, to throw light on the scopeof air charter services, we may refer to international materials discussingthe same, referring in particular to the definitions adopted by theInternational Civil Aviation Organisation (“the ICAO”).

G11.3 Any discussion on charter flights must first begin bydifferentiating between scheduled and non-scheduled flights. The ICAOessentially defines scheduled flights as those which are scheduled andperformed as per a fixed timetable, or are so regular and frequent so asto constitute a recognizably systematic series, and are open to directbookings by members of the public.[3]

H3 Glossary of Terms adopted by the International Civil Aviation Organisation, availableat https://www.icao.int/dataplus_archive/Documents/20130729/GLOSSARY.doc.

11.4 In contrast, non-scheduled services are described ascommercial air transport services performed as other than a scheduledservice.[4] In the Manual on the Regulation of International AirTransport, the ICAO defines a chartered flight as a non-scheduledoperation using a chartered aircraft. At the same time, a charter isstated to be a contractual arrangement between an air carrier and anentity hiring or leasing its aircraft. Importantly, reference is made tothe “single-entity charter” or “own use charter”, which is describedin the following terms:

“…the most basic and timeless type, the single entity charteror own-use charter, one chartered by one entity (e.g. an individual,corporation, government) solely for its own use for the carriageof passengers and/or freight, with the cost borne solely by thatentity and not shared directly or indirectly by others.” (emphasisadded)

11.5 It is undisputed in the instant case that the glider in questioncould seat only two persons. Thus, in offering sightseeing services on aglider plane for a fixed consideration, the Pemberton Soaring Centregave out the entirety of the aircraft on hire for the duration of the aerialjourney, though one seat was reserved for the pilot. In our consideredopinion, this practice may constitute an own-use charter. Moreover, wenote that there is no dispute that the Pemberton Soaring Centre was anincorporated company. Keeping in mind that the Appellant has itselfomitted to define what it means by an “air charter company” in thePolicy, we are again, for the purposes of the Policy, inclined to extendthe benefit of the ambiguity in the meaning of the term to the claimant.Thus, we affirm the National Commission’s finding that the PembertonSoaring Centre was an air charter company within the meaning of clause7(xiv) of the Policy.

12. The last issue to be determined is whether the deceased wasa fare-paying passenger on the glider in question. We find no force inthe Appellant’s contention that the deceased was not a passenger merelybecause the journey was supposed to begin and terminate at the samelocation; indeed, this contention was duly dealt with and rejected by theNational Commission. Needless to say, the purpose of the journey wasto fly over various scenic spots, and after completion, the glider was to 4 International Civil Aviation Organisation, The Manual on the Regulation of InternationalAir Transport (Doc. 9626, 3[rd] edition, 2016).

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Areturn to a designated location, presumably from where it took off. Asnoted by the National Commission, this would not be dissimilar to how asightseeing bus might originate and terminate its journey at the samespot after passing by various places of interest. We find it difficult toconclude that a person undertaking such a journey would not amount toa “passenger”.B

12.1 Further, it is evident from the record that the journey on theglider was undertaken for a fixed consideration, though the ticket for thesame has not been placed on record. Thus, we affirm the NationalCommission’s finding that the deceased was a fare- paying passengeron the glider in question.

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13. In view of the above discussion, we find that the accident outof which the instant claim arose was completely covered under the ambitof the Policy, since the deceased was travelling in a duly licensed standardtype of aircraft, which brings him out of the exclusion in Clause 7(ix)(iii),and was travelling as a fare-paying passenger in a flight of an air charterDcompany, bringing him out of the scope of the exclusion in Clause 7(xiv).Thus, we find no reason to interfere with the impugned judgment, whichfound that the Appellant wrongly repudiated the claim filed by RespondentNo. 1.

14. The instant appeal is therefore dismissed. Ordered accordingly.

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Ankit Gyan

Appeal dismissed.

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