State Consumer Disputes Redressal Commission
B.M, The Oriental Insurance Co.Ltd vs Tiwari Sethi & Anr on 8 August, 2024
Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
FA/24/63 Vs. 08/08/2024
Tiwari Sethi & Anr.
AFR / NAFR
CHHATTISGARH STATE
CONSUMER DISPUTES REDRESSAL COMMISSION
PANDRI, RAIPUR
Date of Institution: 01/02/2024
Date of Final Hearing: 16/07/2024
Date of Pronouncement: 08/08/2024
APPEAL No.- FA/24/63
IN THE MATTER OF :
Branch Manager, The Oriental Insurance Co. Ltd.,
Branch Office: Hotel Laxman Avenue Building,
JAGDALPUR Dist. BASTAR (C.G.) ... O. P. No.1 /Appellant
Through: Shri Shishir Bhandarkar, Advocate
Vs.
1. Tiwari Sethi, S/o. Late Shri Kangalu Sethi,
R/o. Vora Camp, Ward No.04, Kirandul, Dantewada,
Dist. DAKSHIN BASTAR (C.G.) ... Complainant/Respondent No.1
Through: Shri Abhijit Singh Tomar, Advocate
2. Shri M.A. Rawani,
R/o. Ashiyana, Sector-01, Kailash Residency,
Meera Datar Road, Shankar Nagar, Raipur,
Dist. RAIPUR (C.G.) ... O.P. No.2/Respondent No.2
Through: Ex-parte.
CORAM: -
HON'BLE SHRI JUSTICE GAUTAM CHOURDIYA, PRESIDENT
HON'BLE SHRI PRAMOD KUMAR VARMA, MEMBER
PRESENT: -
Shri Shishir Bhandarkar, Advocate for the appellant.
Shri Abhijit Singh Tomar, Advocate for respondent No.1.
Proceeded ex-parte against respondent No.2 vide order dated 18.06.2024.
ORDER
PER: - JUSTICE GAUTAM CHOURDIYA, PRESIDENT This appeal, filed under Section 41 of the Consumer Protection Act 2019 (hereinafter called "the Act" for short) is directed against order dated 15.12.2023 passed by District Consumer Disputes Redressal Commission, Dakshin Bastar, Dantewada (hereinafter called "District Commission" for short) in complaint case No.CC/2022/10 whereby the complaint filed by the respondent No.1 herein was partly allowed and the opposite party No.1/ appellant was directed to pay within one month Rs.74,050/- (Rupees Seventy Four Thousand & Fifty) to the complainant/ respondent No.1 herein as compensation for loss to the insured vehicle with interest Allowed Page 1 of 9 Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
FA/24/63 Vs. 08/08/2024
Tiwari Sethi & Anr.
@ 7% p.a. from the date of filing complaint 14.10.2022 till realization failing which the interest was directed to be paid @ 9% p.a. Compensation towards physical, mental and financial harassment Rs.10,000/- (Ten Thousand) and cost of litigation Rs.3,000/- (Three Thousand) were also directed to be paid by the opposite party No.1/ appellant to the complainant/ respondent No.1. Feeling aggrieved the insurance company opposite party No.1 has preferred this appeal.
2. Briefly stated the facts of the case are that a truck owned by the complainant/ respondent No.1 bearing registration No.CG-18-H-1068 was insured by the opposite party No.1/ appellant for the period between 31.03.2020 to 30.03.2021, during which on 25.10.2020 the said vehicle met with an accident and got damaged which incurred expenses of Rs.5,20,696/- in repairing. Insurance claim was preferred but the insurance company only paid Rs.1,90,450/- as against Rs.5,20,696/- alleging which as deficiency in service complaint was filed seeking balance amount of expenses incurred in repairing of the vehicle.
3. The opposite party No.1/ appellant resisted the complaint on the ground that on receipt of claim spot surveyor Mr. Satnam Singh Dhanua and thereafter Surveyor and Loss Assessor Mr. M.A. Rawani were appointed. Mr. M.A. Rawani conducted final survey and re-inspection of the vehicle and assessed the loss to the tune of Rs.2,33,000/- in his report dated 25.03.2021. On receipt of survey report the opposite party No.1/ appellant insurance company sent several letters to the complainant/ respondent No.1 for submission of cash receipt and tax invoices and got the bills of repairs verified from Shri Rahul Bhattacharya, who after verification of available cash receipt and tax invoices assessed the loss to Allowed Page 2 of 9 Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
FA/24/63 Vs. 08/08/2024
Tiwari Sethi & Anr.
the tune of Rs.1,90,450/- and accordingly the said amount paid in which no deficiency in service was committed.
4. The opposite party No.2/ respondent No.2 herein remained ex- parte before the District Commission.
5. Learned District Commission in the impugned order arrived at a conclusion that the opposite party No.1/ appellant has committed deficiency in service in not paying the amount of insurance claim and on the basis of bills submitted by the complainant/ respondent No.1 observed that the complainant/ respondent No.1 is entitled to get a total sum of Rs.2,66,500/- against the insurance claim and as an amount of Rs.1,90,450/- has already been paid, hence partly allowing the complaint direction for payment of balance amount of Rs.74,500/- was passed.
6. Final arguments heard and perused the record as well as the written arguments submitted by learned counsels for parties.
7. Learned counsel for the appellant / opposite party No.1 reiterating their averments made in the written version argued that learned District Commission has failed to appreciate the fact that the respondent No.1 / complainant had already received the amount vide discharge voucher dated 15.06.2022 and payment voucher dated 08.07.2022 in full and final satisfaction without raising any objection and as such the respondent No.1/ complainant was stopped from claiming any further amount. It is further argued that the vehicle was 09 years old therefore as per schedule under the policy, the parts of the repairing were liable for deduction of 40% towards depreciation. The District Commission should have seen that the bills of parts and repairs amounted only to Rs.1,94,290/- which was correctly assessed to Rs.1,90,450/- after deduction of compulsory excess Rs.1,500/- and salvage value of Rs.2,340/- by Shri Rahul Bhattacharya in Allowed Page 3 of 9 Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
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Tiwari Sethi & Anr.
his bills verification report dated 13.05.2022. But the above fats were misconceived by learned District Commission and an erroneous order has been passed, which deserves to be set aside.
8. Learned counsel for the respondent No.1/ complainant also reiterating the averments made in the complaint supported the impugned order and argued that after receiving final report of a competent surveyor, appointed by the appellant/ opposite party No.1 insurance company itself, appointing another person and sending the bills to him for verification is not permissible under the law. The respondent No.2/ opposite party No.2 Surveyor in this report under the head CONCLUSION mentioned that "The vehicle was found fully repaired with all repair/ labour work done as per the recommendation made by me. Hence the claim may be processed accordingly". The insurance company was duty bound to pass the claim on the recommendation/ final report of the surveyor but they chose to appoint another person for bill verification, which is not permissible under the law. It is further argued that if for any reason the reports of the surveyor is not acceptable, the insurer had to give valid reason for not accepting the report as held by the Hon'ble Apex Court in Sri Venkateswara Syndicate Vs. Oriental Insurance Company Ltd. & Anr, (2009) 14 (ADDL.) SCR 57 and National Insurance Company Ltd. Vs. Vedic Resorts and Hotels Pvt. Ltd., 2023 LiveLaw (SC) 445. It is also argued that the insurance company cannot act as loss assessor and the loss assessor can only be the surveyor appointed by the authority under IRDA Act. The only option under section 64 UM as held by the Hon'ble Supreme Court in Sri Venkataswara Syndicate (supra) case is to appoint another surveyor but that too with the permission of IRDA. Allowed Page 4 of 9 Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
FA/24/63 Vs. 08/08/2024
Tiwari Sethi & Anr.
9. We have considered the arguments advanced by both the learned counsels. So far as the argument of the appellant's counsel that as the respondent No.1/ complainant submitted discharge voucher and payment voucher in full and satisfaction of claim and thereby he was estopped from claiming any further amount is concerned, Hon'ble National Commission in the case of M/s. V.K. Gupta & Associates & 3 Ors. vs New India Assurance Co. Ltd., dated 18.01.2018, on the basis of circular dated 24.09.2015 of the IRDA, has held that even if the settlement voucher has been signed, the complainant may pursue the complaint. We have gone through the above circular of the IRDA and the judgements relied by both parties. Regarding discharge voucher in settlement of claim, the circular dated 24.09.2015 of the IRDA envisages that : -
"The Insurance Companies are using 'discharge voucher' or "settlement intimation voucher" or in some other name, so that the claim is closed and does not remain outstanding in their books. However, of late, the Authority has been receiving complaints from aggrieved policyholders that the said instrument of discharge voucher is being used by the insurers in the judicial fora with the plea that the full and final discharge given by the policyholders extinguish their rights to contest the claim before the Courts.
While the Authority notes that the insurers need to keep their books of accounts in order, it is also necessary to note that insurers shall not use the instrument of discharge voucher as a means of estoppel against the aggrieved policy holders when such policy holder approaches judicial fora.
Accordingly insurers are hereby advised as under:
Where the liability and quantum of claim under a policy is established, the insurers shall not withhold claim amounts. However, it should be clearly understood that execution of such vouchers does not foreclose the rights of policy holder to seek higher compensation before any judicial fora or any other fora established by law. All insurers are directed to comply with the above instructions."
On the basis of above circular Hon'ble National Commission in M/s. V.K. Gupta & Associates (supra) in paragraph No.17 held that :-
"17. ---------. Based on the circular dated 24.09.2015 of the IRDA, it seems that even if the settlement voucher has been signed, the complainant may pursue the complaint. In the present case, after accepting the settlement amount, the complainants have already written to the Insurance Company stating their dissatisfaction and the manner in which the amount of Rs.15,14,032/- has been deducted. Thus, the complainant has protested after receiving the settlement amount. Thus, on the basis of the IRDA Regulations, complaint needs to be considered on merits in the present case."Allowed Page 5 of 9
Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
FA/24/63 Vs. 08/08/2024
Tiwari Sethi & Anr.
In view of the above judgement of Hon'ble National Commission on the basis of IRDA circular, we are of the view that signing of discharge voucher does not waive the right of the policy holder to seek higher compensation before any judicial fora.
10. It is not in dispute that an amount of Rs.1,90,450/- has already been paid against the insurance claim in question on the basis of report dated 13.05.2022 of Mr. Rahul Bhatacharya, Surveyor & Loss Assessor, OP (1) Exhibit-20 and as per arguments of the appellant's counsel he was appointed for verification of bills, but from his report it appears that he has not only considered the assessed amount and bill price but has also deducted 50% depreciation in almost all the items. In this case after spot survey, Surveyor Mr. M.A. Rawani was appointed for final survey and assessment of loss, who submitted his final survey report dated 20.03.2021, OP (1) Exhibit-06 and the loss was assessed for Rs.2,33,000/- after deducting salvage of amount of Rs.2,340/-.
11. The core issue involved this is appeal is whether action of the insurance company of appointment of Mr. Rahul Bhattacharya, may be for verification of bills, was legal and in accordance with the provisions of the act. Learned counsel for the respondent No.1/ complainant has vehemently argued that insurance company must give cogent reasons for not accepting final survey report of Mr. M.A. Rawani. In this regard learned counsel for respondent No.1/ complainant has relied upon judgement of Hon'ble Apex Court in Sri Venkentswara Syndicate (supra) and Vedic Resorts and Hotels (supra). In Vedic Resorts and Hotels (supra) Hon'ble Apex Court in paragraph No.17 has held as under : -
"------. Though it is true that the Surveyor‟s Report is not the last and final one nor is so sacrosanct as to the incapable of being departed from, however, there has to be some cogent and satisfactory reasons or grounds made out by the insurer for not accepting the Report. We are afraid in the Allowed Page 6 of 9 Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
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instant case, the appellant-Insurance Company has failed to make out any such cogent reason for not accepting the surveyor‟s Report."
12. At this juncture it is quite pertinent to refer to the Section 64- UM(2), (3) & (4) of the Insurance Act 1938 which are as under: -
"64-UM. (2) No claim in respect of a loss which has occurred in India and requiring to be paid or settled in India equal to or exceeding twenty thousand rupees in value on any policy of insurance, arising or intimated to an insurer at any time after the expiry of a period of one year from the commencement of the Insurance (Amendment) Act, 1968, shall, unless otherwise directed by the Authority, be admitted for payment or settled by the insurer unless he has obtained a report, on the loss that has occurred, from a person who holds a licence issued under this section to act as a surveyor or loss assessor (hereafter referred to as „approved surveyor or loss assessor‟):
Provided that nothing in this sub-section shall be deemed to take away or abridge the right of the insurer to pay or settle any claim at any amount different from the amount assessed by the approved surveyor or loss assessor.
(3) The Authority may, at any time, in respect of any claim of the nature referred to in sub-section (2), call for an independent report from any other approved surveyor or loss assessor specified by him and such surveyor or loss assessor shall furnish such report to the Authority within such time as may be specified by the Authority or if no time-limit has been specified by him within a reasonable time and the cost of, or incidental to, such report shall be borne by the insurer. (4) The Authority may, on receipt of a report referred to in subsection (3), issue such directions as he may consider necessary with regard to the settlement of the claim including any direction to settle a claim at a figure less than, or more than, that at which it is proposed to settle it or it was settled and the insurer shall be bound to comply with such directions:
Provided that where the Authority issues a direction for settling a claim at a figure lower than that at which it has already been settled, the insurer shall be deemed to comply with such direction if he satisfies the Authority that all reasonable steps, with due regard to the question whether the expenditure involved is not disproportionate to the amount required to be recovered, have been taken with due dispatch by him:
Provided further that no direction for the payment of a lesser sum shall be made where the amount of the claim has already been paid and the Authority is of opinion that the recovery of the amount paid in excess would cause undue hardship to the insured:
Provided also that nothing in this section shall relieve the insurer from any liability, civil or criminal, to which he would have been subject but for the provisions of this sub-section."
The term "Authority" is defined under section 2 (1A) of the Insurance Act 1938 as : -
"Authority" means the Insurance Regulatory and Development Authority established under sub-section (1) of section 3 of the Insurance Regulatory and Development Authority Act, 1999."Allowed Page 7 of 9
Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
FA/24/63 Vs. 08/08/2024
Tiwari Sethi & Anr.
This issue was earlier discussed and decided by the Hon'ble Apex Court in the case of New India Assurance Company Limited Vs. M/s.
Protection Manufacturers Private Limited, 2010 7 SCC 386. In that case the interpretation of Section 64 UM of the Insurance Act, 1938 by the Hon'ble Apex Court in paragraph 35 was as under : -
"35. The submissions of Mr. Piyush Gupta in regard to Section 64 UM of the Insurance Act, 1938, are also of substance, as the Appellant Insurance Company should have applied to the Regulatory Authority under the Act for a second opinion instead of appointing M/s. J. Basheer & Associates for the said purpose unilaterally. The reports submitted by M/s. J. Basheer & Associates are liable to be discarded on such ground as well."
In view of the above it appears that insurer should have moved an application before the IRDA for appointment of an independent second surveyor as per provisions of the Insurance Act instead of directly appointing another surveyor, may be for the purpose of verification of bills as argued by the appellant's counsel, but said person Mr. Rahul Bhattacharya not only verified the bills but has also applied depreciations and gave his own assessment of loss upon which the insurance company has acted upon, which was not permissible in view of the above provisions of the Insurance Act.
13. Accordingly, we are of the view that the insurance company was not correct in directly appointing Mr. Rahul Bhatachayra and in such situation the only report which worth to be acted upon is the report of Mr. M.A. Rawani who assessed the loss to the tune of Rs.2,33,000/- to which the respondent No.1/ complainant was entitled to get towards his insurance claim in question and in not paying said amount the appellant insurance company has committed deficiency in service against the respondent No.1/ complainant. However, learned District Commission has erred in arriving at the conclusion that the respondent No.1/ complainant was entitled to get an amount of Rs.2,66,500/- on the basis of Allowed Page 8 of 9 Appeal Nos.: B.M., The Oriental Insurance Co. Ltd. Date of Pronouncement:
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repairing bills instead of believing the report of a duly IRDA licenced competent surveyor & loss assessor.
14. Therefore, with the foregoing discussion we are of the considered view that this appeal deserves to be partly allowed and the impugned order passed by the learned District Commission needs to be modified. Hence this appeal is allowed and the impugned order is modified to the extent that the appellant / opposite party No.1 at the place of Rs.74,050/- as the balance amount of insurance claim shall pay to the respondent No.1/ complainant an amount of Rs.42,550/- (i.e. Rs.2,33,000-Rs.1,90,450) with interest as directed in the impugned order. Remaining directions passed in the impugned order shall remain unchanged. No order as to the cost of this appeal.
(Justice Gautam Chourdiya) (Pramod Kumar Varma)
President Member
/08/2024 /08/2024
Pronounced on: 08th August 2024
Allowed Page 9 of 9