National Consumer Disputes Redressal
Meena Sinha vs United India Insurance Co. Ltd. on 30 April, 2024
NATIONAL CONSUMER DISPUTES REDRESSAL COMMISSION NEW DELHI FIRST APPEAL NO. 1779 OF 2018 (Against the Order dated 08/08/2018 in Complaint No. 12/2018 of the State Commission Chhattisgarh) 1. MEENA SINHA W/O. R.K. SINHA,
R/O. POLICE STATION ROAD, L.B.S. WARD NO 31, MAYAPUR AMBIKAPUR TAHSIL AMBIKAPR SURGUJA CG ...........Appellant(s) Versus 1. UNITED INDIA INSURANCE CO. LTD. THROUGH DIVISIONAL MANAGER BRAMHA ROAD NEAR HOTAL KUMKUM AMBIKAPUR P.S & THSIL AMBIKAPR SURGUJA CG ...........Respondent(s)
BEFORE: HON'BLE MR. SUBHASH CHANDRA,PRESIDING MEMBER HON'BLE DR. SADHNA SHANKER,MEMBER
FOR THE APPELLANT :
Dated : 30 April 2024 ORDER
For the Appellant Mr R K Bhawnani, Advocate (Through VC)
For the Respondent Ms Neerja Sachdeva, Advocate
ORDER
PER SUBHASH CHANDRA
1. This first appeal under Section 19 of the Consumer Protection Act, 1986 (in short, the 'Act') is in challenge to the order dated 08.08.2018 of the State Disputes Redressal Commission, Chhattisgarh, Raipur (in short, the 'State Commission') in Complaint Case No. 12 of 2018 partly allowing the complaint.
2. The delay of 14 days in the filing of this complaint is condoned for the reasons stated in the application for the condonation of delay in the interest of justice.
3. Briefly put, the relevant facts of the case are that the appellant purchased an Ashok Leyland truck model 3718 I.L. with registration no. CG 15 CW 8238 with financial assistance of Cholamandalam Investment and Finance Co. Ltd. and obtained an insurance policy of the respondent insurance company. The vehicle met with an accident on 27.02.2016 while transporting iron rods from Raigarh to Umariya (MP) when the vehicle went off the road into a culvert near Imli Golai Lalpur under Police Station Mahendragarh. The driver died in the accident and the cabin of the truck, chassis and engine were separated and the entire body got damaged. The vehicle was transported to Ambikapur by another truck and an insurance claim was preferred. Respondent appointed Shyam Chhabra, Surveyor to assess the loss. Respondent advised getting the vehicle repaired at the authorized show room of Ashok Leyland at Shri Sai Service Centre, Industrial Area, Ajirma, Ambikapur. An estimate of Rs 18 lakhs was prepared with advance payment of 50%. Despite efforts with the respondent to settle the claim the appellant states that no response was received. Hence a legal notice was issued to respondent on 07.06.2017 which was replied to the same day stating that the claim had been closed. In view of claims being made by the financier, Cholamandalam Investment and Finance Co. Ltd. who threatened to repossess and sell the truck as scrap, a consumer complaint was filed before the State Commission for Rs 27 lakhs and other reliefs.
4. The complaint was contested by the respondent through a written statement stating that as per the final report dated 30.06.2016 of the surveyor Shyam Chhabra, based on inspection on 13.04.2016 and 16.06.2016, it was noted that there was no damage to the engine and cashless net amount was assessed at Rs 7,75,495.75. It was stated that the appellant had not provided the claim form and documents till April 2016. As per the surveyor, neither the appellant nor her husband, who was handling the matter, cooperated in inspections and providing papers or accepting the surveyor's report despite requests and reminders by registered post. The respondent, therefore, closed the claim on 10.11.2016. As per the surveyor's report, a sum of Rs 12,37,793.50 was payable provided the vehicle was repaired and bills were submitted. Eligibility for cashless settlement, without repairs was assessed as Rs.7,75,495.75. Shri Harjeet Singh, Investigator vide his report dated 30.09.2016 reported that the vehicle was parked in an unrepaired state in Azad Body Garage, Ambikapur and based upon the repair estimate, the likely cost of repair was assessed to be Rs 10-12 lakhs. As the Authorised Service Centre failed to reply to queries and the appellant took no steps to dismantle the vehicle for inspection or to accept the settlement of claim, the claim was closed. According to the respondent, there was no deficiency in service and the complaint liable to be dismissed.
5. The State Commission allowed the complaint partly and directed the respondent to pay Rs 10,37,794/- to the appellant within 45 days of the order with interest @ 9% p.a. from the date of filing of complaint (27.04.2018) till realization with Rs 15,000/- as litigation cost. This order is impugned before us with the prayer to set it aside and, in view of the extent of damage to the truck, to consider it as a case of total loss and award IDV value and to consider the vehicle as the property of the respondent insurance company in view of the salvage value of Rs 75,000/- assessed.
6. We have heard the learned counsel for the parties and carefully considered the material on record including the brief written synopses filed.
7. Learned counsel for the appellant contended that the State Commission erred in not considering the loss of the truck as one of "total loss" and that the impugned order was liable to be set aside on that ground alone. It was contended that the authorized Service Centre of Ashok Leyland, the manufacturer of the truck, viz., Shri Sai Service Centre, had estimated the cost of repairs to the truck as Rs 18,00,000/- and had also indicated that the estimate may increase on detailed inspection after dismantling the vehicle. This estimate was made available to the respondent. It was argued that based on this estimate, it was evident that the vehicle was not reparable and that it fell in the category of "total loss". However, the State Commission failed to consider this aspect while adjudicating the complaint. It was also argued that in his report the surveyor had assessed the salvage value as Rs 75,000/- without the truck being dismantled. Thus, even though the truck was accepted to be in a completely damaged condition the salvage value was assessed as only Rs 75,000/-. It was further submitted the State Commission erroneously allowed the claim for Rs 10,37,794/- although the surveyor had assessed the loss as Rs 12,37,793.50. It was also submitted that since the cost of repair would not be less than Rs 21 lakhs, as per IRDA Rules, the vehicle should have been assessed as a "total loss". It was, therefore, prayed that the appeal be allowed.
8. The respondent, on the other hand, would have us believe that the insured did not cooperate with the surveyor and hence, due to the intentional violation of the terms and conditions of the insurance policy, the claim came to be repudiated. It was submitted that the insured, though duty bound to dismantle the vehicle for inspection by the surveyor, failed to do so even when requested to do so by the surveyor by various letters, registered letters and emails. The State Commission's conclusion that the insured was responsible for the surveyor's inability to assess the loss properly cannot, therefore, be faulted according to the respondent. As per the respondent, the State Commission had rightly concluded that the loss value acceptable was Rs 10,37,794/- since the appellant had failed to file any document to prove that the truck was damaged in excess of 75% while noting that the vehicle was parked in a private garage.
9. It is apposite to consider the findings of the State Commission which read as under:
14. In the instant case Shri Shyam Chhabra, Surveyor sent letters to the complainant and also sent letters to the complainant through email and directed the complainant to start dismantling with estimated repair cost in the range of Rs 12 lakhs subject to the policy terms and conditions and acceptance of liability by insurers. The Surveyor again sent letter through email to the complainant on 20th June 2016 (Annexure OP-4). Looking to the above letters, it appears that the complainant had not dismantled the vehicle completely. Therefore, it was not possible for the Surveyor to assess the loss properly. Even then Shri Shyam Chhabra, Surveyor had assessed the loss regarding engine, chassis etc of the vehicle. Therefore, it cannot be held that Shri Shyam Chhabra, Surveyor conducted the survey under the influence of the OP (Insurance Company).
15. Shri Shyam Chhabra, Surveyor in internal page 5 of his Survey Report dated 30.06.2016 in Summary of Estimate and Assessment of Loss, assessed net loss to the tune of Rs 10,37,793.50, net of salvage loss liability (from Repair Basis to the tune of Rs 12,37,793.50 and as per cash loss basis to the tune of Rs 7,75,495.75. The Surveyor assessed the value of salvage Rs 75,000/-. Therefore, the net loss assessed by the Surveyor to the tune of Rs 10,37,793.50 is acceptable. Hence Rs 10,37,793.50 (rounded off to Rs 10,37,794/-) is payable by the OP to the complainant.
21. According to the complainant the vehicle in question was completely damaged and it comes to the total loss, therefore, the complainant is entitled to get Insurer's Declared Value of the vehicle in question. The complainant has not filed any document to prove that the vehicle in question was damaged more than 75%. The vehicle in question was parked by the complainant in a private garage i.e. Azad Body Garage, Ambikapur. Therefore, the prayer of the complainant is not acceptable. Initially Sri Shyam Chhabra Surveyor and Loss Assessor assessed the loss to the tune of Rs 10,37,793.50 (rounded to Rs 10,37,794/-) which is acceptable. The complainant is entitled to get Rs.10,37,794/- from the OP (Insurance Company).
10. The State Commission has relied on the following judgments to emphasize that the report of a surveyor is required to be considered in cases of claims under an insurance policy and that there was no reason to disregard the report of the surveyor in the case on hand:
(i) Devendra Malhotra Vs. United India Insurance Co. Ltd. & Anr., 2016 (3) CLT 525 (NC)
(ii) Oriental Insurance Co. Ltd. Vs. Pavan Enterprises & Anr., I (2016) CPJ 503 (NC)
(iii) New India Assurance Co. Ltd. Vs. Pave Infrastructure Pvt. Ltd., 2015 (3) CPR 577 (NC)
(iv) Garg Acrylics Ltd. through Sh. Anish Bansal, GM (Authorized Representative) Vs. United India Insurance Co. Ltd., 2015 (1) CPR 273 (NC)
(v) The Oriental Insurance Co. Ltd. Through Regional Manager Vs. Ishwar Singh, 2015 (1) CPR 157 (NC)
11. The rival contentions of the parties have been considered. It is apparent that the initial estimate of Rs 18,00,000/- for the repair/assessment of loss was prepared by Shri Sai Service Centre, the authorized Service Centre of Ashok Leyland. This estimate was tentative/approximate as it had required the vehicle to be dismantled for a more realistic assessment and demanded deposit of 50% of the estimated amount to be deposited with it prior to this. The respondent contends that the assessment could not be done since the insured failed to authorize its surveyor to undertake the exercise. Reliance is placed by it on the various letters and emails addressed to the insured, including a final opportunity to permit inspection within 7 days failing which the claim would be closed. As this did not transpire, the claim was closed by it on the basis of its surveyor's report. However, considering the fact that the surveyor had assessed salvage value of the truck as Rs 75,000/-, the respondent has failed to bring any arguments or evidence to substantiate why the loss was not considered as a "total loss". There is no dispute that the truck which was a 2015 model valued at Rs 27,50,000/- at the time the insurance policy was availed. It is apparent that in view of the initial/preliminary estimate by the authorized Service Centre of the manufacturer being Rs 18,00,000/- with the final figure being subject to a more detailed examination, the truck would have suffered extensive and serious damage. For a truck whose purchase value was Rs 27,50,000/- and was only one year old, the value at the time of the accident, with normal depreciation of 10% per annum, would have been around Rs.24,75,000/-. Estimation of salvage value of Rs 75,000/- was assessed by the surveyor appointed by the respondent itself. The respondent insurance company has relied upon the surveyor's report that there was lack of cooperation on part of the insured while closing the claim. The Surveyor's Report dated 30.06.2016 reads as under:
We have suggested the insured's representative Sri Dinesh Sinha, who was present at the local workshop where vehicle has been parked that the vehicle is repairable with replacement of affected parts but till date he has not initiated the dismantling of the vehicle and therefore the repair/replacement work of vehicle has not been started.
On my repeated requests for dismantling of front parts to cheque the extent of damages the insurance representative got minor dismantling done on 16.05.2016 and it was visibly noted that the engine assembly is safe on front end. Even then we have made some provision for any loss to engine section in our status assessment enclosed with this report. The repairer has not added Cowl assly in his estimate but the same has been added by us as it has been damaged. This is for the information of the insurer.
As the insured was not initiating the repairs and dismantling of the vehicle and our requests on phone to her representative, Sri Dinesh Sinha also turned out to be futile, so we wrote a letter to the insured on mail as well as by registered AD on 17.06.2016 and further final reminder on 20.06.2016 requesting him to start the repairs of vehicle so that the claim can be settled as per the policy terms and conditions. The insurer is delaying the matter due to her own will and not initiating the repairs of vehicle for the reasons best known to her.
xxxxx It is to be noted by the insurers that the assessment carried out in status assessment is on the basis of inspection carried out prior to dismantling and further minor dismantling of frontal parts so we have further taken provision of Rs 2 lakhs for the parts that may surface up after dismantling. So in my opinion we have assessed the loss taking all aspects into consideration. Further we have assessed the loss on Cash Loss basis also as the insured is not getting the vehicle repaired and this is only for the reference of insurers.
[Emphasis added]
12. The Insurance Act provides for assessment of loss in excess of Rs.20,000/- though a qualified and IRDA approved surveyor. In Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd. & Anr. in CA No. 4487 of 2004 dated 24.08.2009, (2009) 8 SCC 507, it has been held by the Hon'ble Supreme Court that:
a surveyor's report in cases of claims under a valid policy is an essential requirement under Section 64UM and that the Surveyor's report constitutes an important document that must be considered.
However, it has also been held in New India Assurance Co. Ltd. Vs. Pradeep Kumar, (2009) 7 SCC 787, as under:
15. The object of the aforesaid provision is that where the claim in respect of loss required to be paid by the insurer is Rs.20,000/- or more, the loss must first be assessed by an approved surveyor ( or loss assessor) before it is admitted for payment or settlement by the insurer. Proviso appended thereto, however, makes it clear that insurer may settle the claim for the loss suffered by insured at any amount or pay to the insured any amount different from the amount assessed by the approved surveyor (or loss assessor). In other words although the assessment of loss by the approved surveyor is a pre-requisite for payment or settlement of claim of twenty thousand rupees or more by insurer, but surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured.
[ Emphasis added ] Thus, the surveyor's report is not a sacrosanct document that cannot be departed from in case it is perverse or arbitrary.
13. The IRDA has laid down criteria for the surveyors and prescribed a Code of Conduct for surveyors. The State Commission has extensively alluded to these in its order under challenge. From the facts of this case it is manifest that although the truck suffered severe and extensive damages due to an accident in which the driver died on the spot and the cabin, chassis and body were all separated resulting in the Authorized Service Centre of the manufacturer, Ashok Leyland, estimating the cost of repairs as Rs 18,00,000/-, the claim was not considered as one of "total loss" for the reason that a detailed estimate could not be prepared and the insured did not cooperate in facilitating the same. In the opinion of the State Commission the appellant failed to bring on record any evidence to justify the loss to be a case of "total loss" by proving the loss to be in excess of 75% of the IDV. The State Commission has considered the cashless estimate of damage of Rs 7,75,495.75/- and the estimate of Rs.10,37,793.50/- proposed by the surveyor to arrive at a rounded off amount of Rs 10,37,794/- which has been awarded with compensation as interest @ 9% from the date of the claim till realization.
14. The insured value of the 2015 model truck in question was Rs.27,50,000/-. The date of accident was 27.02.2016. From the Surveyor's Report it is evident that the vehicle had been estimated for loss on the basis of an inspection which could not be very detailed in view of the vehicle not having been dismantled completely. As per Annexure to the said report, the loss assessed was of Rs 9,61,161/- less salvage Rs.75,000/- i.e. Rs 8,86,161/- and after including labour charges estimated for Rs 1,50,632/- and deducting Rs 1500/- Excess, a net amount of Rs 10,35,293.50 was arrived at. However, the Surveyor qualified the estimate vide his mail dated 05.10.2016 to state that the repair estimate may get enhanced by Rs 1-2 lakhs on dismantling. This issue has not been considered by the State Commission.
15. In view of the discussion above, the case of the appellant that the IDV of the vehicle be awarded cannot be sustained since she has not brought any evidence on record to establish damage to the vehicle to be in excess of 75% of the IDV. It is evident that based on preliminary inspection of the vehicle, the report of the surveyor recommended that the vehicle was a fit case for repairs. The decision of the respondent insurance company in rejecting the claim of the appellant, therefore, deserves to be set aside. It is also evident that the estimate of the surveyor has also made provision for an upward revision of Rs 1-2 lakhs. In view of the fact that the truck had been insured in 2015 for an IDV of Rs 27.50 lakhs, and the surveyor's assessment of the truck being repairable, the assessment of Rs 10,35,293.50 has been considered by the State Commission which disposed of the complaint with directions to the insurance company to pay Rs 10,37,794/- with interest @ 9% p.a. with effect from 27.04.2018, the date of filing of the complaint till realization with litigation costs of Rs 15,000/-. However, the surveyor's recommendation to consider Rs 1-2 lakhs (say Rs 2 lakhs) over the estimate has not been considered. As held by the Hon'ble Supreme Court in Pradeep Kumar (supra), the report of the surveyor is not entirely sacrosanct that it cannot be departed from if found to be perverse and arbitrary. The fact that the Surveyor estimated that repair of the truck could go up by Rs.1-2 lakhs and the investigative estimate of the repair cost was in the likely range of Rs.10-12 lakh, an amount of Rs.2.00 lakh over the value worked out by the Surveyor appears to be in order. However, the same has not been included in the report. In this view of the matter, the impugned order is perverse and requires to be modified. The appeal is partly allowed and is disposed of with the following directions:
(i) the respondent Insurance Company shall pay the appellant a sum of Rs 12,37,794/- with interest @ 9% from the date of filing of the complaint (27.04.2018) till the date of this order within 8 weeks of this order, failing which the applicable rate of interest will be 12% till realization;
(ii) respondent shall also pay litigation cost of Rs 50,000/- to the appellant along with the above amount.
15. Pending IAs also stand disposed of with this order.
...................................... SUBHASH CHANDRA PRESIDING MEMBER ............................................. DR. SADHNA SHANKER MEMBER