Delhi District Court
Gold Corp Global Logistics P. Ltd vs Bajaj Allianz General Insurance Co. Ltd on 22 October, 2024
-1-
IN THE COURT OF SH. VIDYA PRAKASH
DISTRICT JUDGE (COMMERCIAL COURT)-02, NEW
DELHI DISTRICT, PATIALA HOUSE COURTS, NEW
DELHI.
CNR NO.: DLND010016282023
CS (COMM.)/105/2023
IN THE MATTER OF:-
GOLD CORP GLOBAL LOGISTICS P. LTD.
2ND FLOOR, SHREE KRISHNA DHARM KANTA
UNIT NO.3 NAHARPUR RUPA ROAD
MAIN NH 8, GURUGRAM
HARYANA
THROUGH ITS DIRECTOR
SH. DAMAN DEWAN
...PLAINTIFF
VERSUS
BAJAJ ALLIANZ GENERAL INSURANCE CO. LTD.
12 FLOOR, GOPAL DAS BHAWAN
28, BARAKHAMBA ROAD, CONNAUGHT PLACE
NEW DELHI -110 001
...DEFENDANT
Date of Institution : 14-02-2023
Date of reserving Judgment : 27-09-2024
Date of pronouncement of Judgment : 22-10-2024
JUDGMENT
1. Vide this judgment,I shall decide the present suit for recovery of Rs.92,26,000/-(Rupees Ninety Two Lacs and Twenty Six Thousand only), filed by the plaintiff against the defendant.
CS (COMM.)/105/2023 Page 1 of 49 -2-FACTS OF THE CASE:
2. The case of the plaintiff, as set out in the plaint, is that the plaintiff, which is stated to be a company incorporated under the Companies Act, 1956, is engaged in the business of transportation and is maintaining a fleet of trucks for the said purpose. It is averred that presently the plaintiff company is engaged in transportation of various logistics and other important material related to construction of Bullet Train project, which is an important project of Government of India and is under direct supervision of the Prime Minister's Office (PMO).
3. It is stated that the defendant is an insurance company incorporated under the Companies Act as a Corporate Body and is having its registered office at Pune and various Division Offices spread all over India. The defendant company is an insurer within the definition of S. 2(9) of the Insurance Act, 1938 and is governed by the provisions of Insurance Act, 1938 along with rules and regulations framed thereunder and the Insurance Regulatory and Development Authority Act (IRDA), 1999 relating to business of insurance. It is further stated that the defendant company is into the business of insurance of various kinds of vehicles and for that purpose, charges insurance amount as per policy terms and conditions and in consideration thereof, renders a number of services. It is further stated that out of number of services being rendered in the policy, one of the services to be rendered in the CS (COMM.)/105/2023 Page 2 of 49 -3- policy is to compensate the loss of insured in case of any mishap.
4. It is the case of the plaintiff that it is owning Tipping Trailer bearing Registration No. RJ 32 GC-6468 [hereinafter referred to as the 'insured vehicle'], which was got insured from the defendant company, vide Policy bearing No. OG-22-1101-1803-00000296 covering the risk of the said vehicle for the period from 20-05-2021 till 19-05-2022 with sum assured being Rs.46,00,000/- It is stated that the insured vehicle was heavy goods vehicle and comprised of two parts - the front part which runs the vehicle is known as Horse and trailer is attached to carry goods.
5. It is further the case of the plaintiff that on the date of loss i.e. 21st November, 2021, the insured vehicle was being driven by the licensed driver namely Sh. Mulayam, who was following all the precautions and was proceeding towards the destination. It is stated that on the way, a truck was going ahead of the insured vehicle and a bus was proceeding ahead of the truck and the bus, which was going ahead of the truck, applied sudden brakes, as such the truck going ahead rammed into the bus and it was sudden impact, as a result of which, the insured vehicle rammed into the truck which had already rammed into the bus. Although, there was no fault on the part of the insured vehicle, an FIR was registered in PS KARJAN U/S 279, CS (COMM.)/105/2023 Page 3 of 49 -4- 304 IPC and 177,184,134 & 187 of the MV Act against the driver namely Sh. Mulayam.
6. It is further stated that the plaintiff company immediately notified the loss to the defendant company. The defendant company appointed Sh. Hiral Patel, surveyor, for the assessment of the loss. The surveyor, so appointed by the defendant company, had examined the insured vehicle and was also provided with all the documents. The plaintiff company, after the examination of the vehicle by the surveyor, had informed the defendant company that since it is handling a pilot project, as such required the settlement of the claim at the earliest in order to acquire another vehicle as the vehicle was total loss. The plaintiff company also addressed various mails to the defendant company as well to the surveyor in this regard, however, neither the surveyor report was shared, nor any decision was conveyed by the defendant company regarding admissibility or non-admissibility of the claim within the time line as per the IRDA.
7. It is further stated that the defendant company despite noticing the facts about damage to the vehicle and the costs involved in the repair of the vehicle, which was more than 75 percent of sum insured, failed to release the insurance amount. The authorized repairer had given the estimate of repairs of Rs.43,50,084.46 Paise (Rupees Forty Three Lacs Fifty Thousand Eighty Four & Paise Forty Six only) to the plaintiff company and which was shared with CS (COMM.)/105/2023 Page 4 of 49 -5- the defendant company as well as the surveyor. It is stated that the actual cost of repair would have been more than that. It is alleged that the plaintiff company addressed numerous communications in this regard seeking release of the amount but failed to evoke necessary response from the defendant company. The defendant company, since it never intended to settle the claim, as such has failed to convey its decision till date.
8. It is stated that the defendant company has been taking a false plea without any cogent evidence that the vehicle was being driven by Sh. Sanjay and not by Sh. Mulayam. Although, it was being driven by Sh. Mulayam, the plaintiff company also provided license details of the alleged driver also, which is valid as per record. It is also stated that the alleged driver might have loaded the vehicle which is common phenomenon that the senior driver rest at the time of loading point and appoint junior driver to load and collect the documents. It is further stated that apart from above, a vague plea is also taken by the defendant company that the vehicle was loaded at the relevant time, however, on the contrary, it was empty and which fact is apparent from the Mechanical Inspection Report.
9. It is stated that the defendant company failed to take into consideration the fact that there is no clause, whereby the claim can be repudiated, as the plaintiff company has not committed any breach of the policy terms. The contract, which was extended by the defendant company, provided CS (COMM.)/105/2023 Page 5 of 49 -6- for indemnification of the loss suffered by the insured. The loss was assessed and found to be payable by the defendant company. Accordingly, there was no occasion for the defendant company to withhold the claim. The defendant company, with an intention not to pay the claim amount, started claiming that the driver has been planted and Mulayam was not driving the insured vehicle. The police investigated the case and filed the charged sheet against Sh. Mulayam, as such, the defendant company is estopped from raising frivolous plea in this regard. It is also stated that report of surveyor is tutored report and which fact gets affirmed from the fact that the Surveyor report was not shared with the plaintiff company till date. The time spent by the surveyor to finalize the said report itself exposes malafide on the part of surveyor as well as the defendant company. The said act of withholding the genuine claim has caused tremendous loss to the plaintiff company as it has resulted into denying the rightful and legal claim of the plaintiff company. It is stated that the surveyor has given a false report at the instance of the defendant company without making any appropriate enquiry. It is stated that the defendant company intentionally and deliberately delayed the claim as the defendant company was looking for some reason for rejection of the claim.
10. It is further stated that the insurance claim is a contract of indemnification and the defendant company, by not doing CS (COMM.)/105/2023 Page 6 of 49 -7- so, has committed breach of the terms of the policy. It is also stated that there is deficiency of service on the part of the defendant company amongst other, inter alia, the defendant company by not settling the claim within the time period as fixed by IRDA has caused deficiency in service; the officials of the defendant company have failed to respond to various communications as made out by the plaintiff company seeking indemnification of the loss; there was undue delay in submitting the report and the same constitutes deficiency of service. Thus, it is stated that since the defendant is guilty of deficiency of service and of unfair trade practice, the insurance company is bound to compensate to the claimant/plaintiff a sum of Rs.46,00,000/- (Rupees Forty Six Lacs only) being the sum insured and interest thereon @ 18% per annum from the date of loss.
11. It is further submitted that the plaintiff has been made to suffer mentally as well as financially due to illegal acts of the insurance company and therefore, the defendant is liable to compensate on account of delay of disbursement of the insured amount, mental harassment and cost of litigation. It is further stated that due to negligent act of the defendant company, the plaintiff has suffered the loss of Rs.10,000/- per day and in order to prove the same, the plaintiff has filed copy of contract which was executed by Sister Company of the plaintiff company with the main vendor and balance sheet. Thus, it is claimed that if the CS (COMM.)/105/2023 Page 7 of 49 -8- total loss from the date of vehicle loss is taken into consideration, then, the plaintiff company has suffered the loss of Rs.37,30,000/-, which is calculated from 22-11-2021 till 31-11-2022. Further, it is also stated that the defendant company is also liable to pay Rs.1000/- per day towards parking charges which has been claimed by the Authorized Repairer as the damaged vehicle is standing in their workshop and occupying the space, calculated from 01-03-2022 till 30-11-2022 and thus, a sum of Rs.2,75,000/- has been claimed on the basis that said liability has arisen due to willful delay caused by the defendant company. It is further stated that since the defendant company was to settle the claim within 90 days, as such, after 90 days of the loss, it is liable to pay the interest and since the insured vehicle was commercial vehicle and was being used for commercial purpose, as such, the defendant company is liable to pay the interest @ 18% per annum on the sum insured. In this regard, it is stated that the loss had taken place on 22-11-2021 as such interest on the sum insured of Rs.46,00,000/- is payable by the defendant company from 28th February, 2022 and accordingly, a sum of Rs.6,21,000/- is claimed as interest accrued from 01-03-2022 till 30-11-2022. The plaintiff, through its counsel, got issued legal notice to the defendant company seeking recovery of sum insured along with other losses, however, despite being served with the said legal notice, the defendant company failed to pay the claimed amount. Thus, the plaintiff company has filed the present CS (COMM.)/105/2023 Page 8 of 49 -9- suit seeking recovery of total sum of Rs.92,26,000/-, the details of which are as under:-
Sum Insured Rs.46,00,000/-
Loss of Business Rs.37,30,000/-
Parking Charges Rs.2,75,000/-
Interest as calculated above Rs.6,21,000/-
TOTAL Rs.92,26,000/-
12. Summons of the suit were issued to the defendant in terms of relevant order. The defendant put its appearance through counsel and filed written statement contesting the suit. It may be noted that since there was delay in filing the written statement, it was accompanied with an application seeking condonation of delay in filing the written statement, which was allowed subject to payment of cost of Rs.7000/- payable by defendant to the plaintiff, vide order dated 02-11-2023, passed by Ld. Predecessor of this Court. Consequently, the written statement was taken on record.
13. In the written statement, the insurance company has taken various preliminary objections, inter alia, that the plaintiff has concealed various facts and correspondences, to shift the entire blame on the defendant. It is stated that the plaintiff has approached this Court with unclean hands and has concealed material information necessary for the adjudication of the present suit. It is stated that the present suit is replete with factual perversity and contains incorrect and misconceived submissions and the present suit has CS (COMM.)/105/2023 Page 9 of 49 -10- been filed by plaintiff as a mere tool to arm-twist the defendant and to harass the defendant in order to obtain wrongful and illegal insurance claim which, in the ordinary course of action, would not be considered or granted by the defendant. It is stated that the plaintiff has pleaded incongruent averments and has based the present suit on false surmises and vague conjectures.
14. In 'Reply on Merits', the defendant company has admitted that the plaintiff got the insured vehicle insured from it, vide Policy bearing No.OG-22-1101-1803-00000296 on the terms and conditions mentioned therein. However, it is stated that the plaintiff was thoroughly briefed by defendant about the terms and conditions of the insurance contract (which is also available in public domain on the website of the defendant) and thus, the plaintiff had complete knowledge about the same. It is also claimed that there has been no addition/ amendment/ deletion in the terms and conditions of the said insurance contract after issuance of the said policy to the plaintiff.
15. It is, however, stated that on receipt of claim intimation from the insured, the said claim was registered, vide Claim No.OC-22-2201-1803-00000334 and immediately thereafter, claim process was started and an independent IRDA licensed Surveyor and an Investigator were appointed to assess the loss suffered and to verify the genuineness of the said claim respectively. Despite number of letters being sent to the plaintiff asking for clarifications CS (COMM.)/105/2023 Page 10 of 49 -11- regarding discrepancies found in their claim, no reply was received from the side of the plaintiff company, as a result of which, the defendant rightly repudiated the said claim vide letter dated 14-6-2022, as per terms and conditions of the insurance policy and in view of suppression of material facts and breach of insurance contract from the plaintiff's side. For this purpose, the defendant has also referred to two letters dated 04-1-2022 and 11-01-2022 through which such clarifications, with respect to raised discrepancies, were sought by it from the plaintiff company.
16. As per the defence raised by defendant company, the plaintiff company intended to defraud it by filing wrong and inflated claim, for which, it has referred to relevant portion of the observations contained in Investigation Report dated 31-12-2021. It is claimed that Surveyor Report was shared with the plaintiff. Further, the details of the driver, as per weight bridge receipt is Mr. Sushil, whereas the name of the driver is Mr. Sandeep as per Lorry Receipt and as per verbal confirmation by Mr. Mulayam, the name of the driver is Mr. Arvind. Based on these averments, it is claimed by defendant company that the plaintiff had filed wrong and inflated claim in order to defraud it and thus, the plaintiff is guilty of misrepresentation and suppression of material facts from defendant while filing their claim and therefore, the defendant was justified to repudiate the claim of the CS (COMM.)/105/2023 Page 11 of 49 -12- plaintiff on account of fundamental breach of the insurance contract.
17. As regards objection to the Report of Surveyor raised by the plaintiff, the defendant company has stated that since such Report of Surveyor does not substantiate claim of the plaintiff, it is trying to question independence of the Surveyor in order to mislead this Court. Further, it is stated that the plaintiff has also inflated the costs of repair of the insured vehicle, which according to the IRDAI loss valuator, is significantly lesser than what the plaintiff has been asking for. It is stated that the insurance claim is a claim arising out of the contract of indemnity and thus, the plaintiff cannot be allowed to gain profit or benefit out of such contract by inflating claim value as was done in this matter.
18. It is denied that there has been any deficiency of service on the part of the defendant company by claiming that the defendant had processed the claim of the plaintiff even after defects on the part of plaintiff highlighted by the Surveyor Report and same would clearly establish that the defendant had fulfilled all its obligations as service provider in diligent manner. It is denied that the defendant failed to comply the provisions of IRDAI (Protection of Policy Holders Interest) Regulation, 2000. It is averred that even if the claim of the plaintiff is presumed to be valid, then also, the plaintiff is only entitled to claim of amount of actual damage that occurred and not the complete sum CS (COMM.)/105/2023 Page 12 of 49 -13- insured for the reason that insured person cannot attain any gain out of insurance contracts, same being the contract of indemnity. In view of this stand, the defendant company has disputed its liability to pay any amount against the claim of loss of business @ 10,000/- per day as well as parking charges raised by the plaintiff in this suit. Thus, it is prayed that the suit of the plaintiff is liable to be dismissed with costs.
19. The plaintiff has filed replication to the written statement, thereby denying the averments made in the written statement while reiterating more or less the same averments as mentioned in the plaint.
ISSUES:
20. From pleadings of the parties, the following issues were framed, vide order dated 15.01.2024, passed by this Court:-
i. Whether plaintiff is entitled to recover suit amount of Rs.92,26,000/- from the defendant company, as prayed for? OPP ii. Whether the plaintiff is entitled to recover interest? If yes, at what rate and for which period? OPP iii. Relief.
21. It may be noted, vide aforesaid order, while exercising its power conferred under Order XV A Rule 6 (o) and (p) CS (COMM.)/105/2023 Page 13 of 49 -14- CPC, the Court directed that the evidence shall be recorded on commission basis by Ld. Local Commissioner, appointed by this Court and accordingly, appointed Sh. C. K. Chaturvedi, Retd. District & Sessions Judge, Delhi as Local Commissioner to record evidence on commission basis and both the parties were directed to lead their respective evidence before above mentioned Local Commissioner.
22. In support of its case, the plaintiff has examined two witnesses - PW1 Sh. Daman Diwan, its Authorized Representative/ director, and PW-2 Mr. Dharmendra Sadh.
23. PW-1 led his examination-in-chief by way of affidavit (Ex.PW1/A) and deposed in terms of the averments made in the plaint. He has relied upon the following documents:-
Sr. Details of documents Exhibit
No.
1. Copy of proposal and copy of policy Ex.PW-1 and P-2 [Admitted]
2. Copy of Board Resolution Ex.PW1/1
3. Copy of fitness authorization, Ex.PW1/2 to authorization, permit and Ex.PW1/5 registration certificate 4. Copy of claim form Ex.PW1/6 CS (COMM.)/105/2023 Page 14 of 49 -15- Sr. Details of documents Exhibit No.
5. Copy of Driving License of Sh. Ex.PW1/7 Mulayam
6. Copy of FIR and chargesheet Ex.PW1/8 alongwith translated copy
7. Copy of driving license of Sh. Sushil Ex.PW1/9 Kumar
8. Copy of estimate of repair Ex.PW1/10
9. Copy of e-mail as exchanged Ex.PW1/12 [Admitted]
10. Photographs of damaged vehicles Ex.PW1/13 (Colly.)
11. Downloaded copy of memorandum Ex.PW1/14
12. Downloaded copy of registration Ex.PW1/15 certificate of plaintiff company
13. Copy of PAN Card of plaintiff Ex.PW1/16
14. Copy of Aadhar Card Ex.PW1/17
24. Pertinently, the repair estimate, which was shown as Ex.PW1/11 in the affidavit of evidence, was not relied by this witness in view of Ex.PW1/10 i.e. copy of estimate of repair.CS (COMM.)/105/2023 Page 15 of 49 -16-
25. PW-1 was cross-examined at length, which shall be discussed in succeeding paragraphs.
26. PW-2 also led his evidence by way of affidavit Ex.PW2/1 with respect to transactions between Global Impex and Gold Corp Global Logistic Pvt. Ltd., and relied upon the following documents:-
Sr. No. Details of documents Exhibit
1. Copy of Aadhar Card Ex.PW2/1A
2. Downloaded copy of GST Ex.PW2/2
Registration of M/s Global Impex
3. Copy of ledger account relating to Ex.PW2/3
L&T Ltd. for the period of
01.4.2021 to 31.03.2024
4. Copy of various work orders Ex.PW2/4
received from L&T Ltd. by M/s (Colly.)
Global Impex
5. Ledger account of plaintiff with Ex.PW2/5
witness's company for period
01-11-2021 to 31-12-2021
6. Certificate u/s 65B of Indian Ex.PW2/6
Evidence Act
27. PE was closed vide proceedings dated 24-2-2024 of Ld. Local Commissioner.CS (COMM.)/105/2023 Page 16 of 49 -17-
28. Thereafter, defendant's evidence was led, during which, the defendant has examined three witnesses - DW1 Ms. Eileen Tirkey, DW-2 Sh. Hiral S. Patel (Surveyor) and DW-3 Sh. Anjal Shah (Investigator).
29. DW-1 Ms. Eileen Tirkey, AR of defendant, led her examination-in-chief by way of affidavit (Ex.DW1/1) and deposed in terms of the averments made in the written statement. She relied upon following documents:-
Sr. No. Details of documents Exhibit/Mark 1 Copy of I.Card Ex.DW1/A 2 Commercial vehicle package Ex.DW1/B policy wordings [objected to] 3 Copy of letter dated 04-01-2022 Ex.DW1/C [objected to] 4 Copy of letter dated 11-01-2022 Ex.DW1/D [objected to] 5 Copy of repudiation letter dated Ex.DW1/E 14-06-2024 [objected to]
30. DW-1 was cross-examined at length, which shall be discussed in succeeding paragraphs.
31. DW-2 Sh. Hiral S. Patel, Surveyor, has also led his evidence by way of affidavit Ex.PW2/1 and relied upon his detailed report as Ex.PW2/A. He was also cross-examined at length, which shall be discussed in succeeding paragraphs.CS (COMM.)/105/2023 Page 17 of 49 -18-
32. DW-3 Mr. Anjal Shal, investigator, has also led his examination-in-chief by way of affidavit Ex.PW3/1 and relied upon documents i.e. Authority dated 11-12-2021 received by him from the defendant company through e-mail and investigation report, which are exhibited as Ex.PW3/A and Ex.PW3/B respectively.
33. DE was closed vide proceeding dated 26-4-2024 of Ld. Local Commissioner.
34. I have already heard Ld. Counsels for the parties. I have also gone through the material available on record including the written submissions and the authorities cited at the Bar and relied upon by the parties.
35. My issue-wise findings are as under:-
ISSUE NO.1
36. Firstly, I shall take up the issue no. (i), which is reproduced hereunder:-
Issue no. (i) - Whether plaintiff is entitled to recover suit amount of Rs.92,26,000/- from the defendant company, as prayed for? OPP
37. The onus to prove this issue has been placed upon the plaintiff. As already noted above, in order to discharge the aforesaid onus and proving its case, the plaintiff has examined two witnesses, who deposed during their CS (COMM.)/105/2023 Page 18 of 49 -19- examination-in- chief by way of affidavits, on the identical lines as averred in the plaint.
38. PW-1 Sh. Daman Dewan was cross-examined at length. In his cross-examination, he stated that he is Director in the plaintiff company since February,2021. The vehicle in question was purchased in May,2021 as indicated in the R.C. of the vehicle. The vehicle was valued for Rs.46 Lacs. The insurance policy was obtained at the time of vehicle's registration. At the time of insurance, the Ex.P-2 i.e. Schedule of the policy was issued which was running into two pages. The policy was through an Agent Ms. Meenakshi Suri. He further stated that Driver of the vehicle Mr. Mulayam was engaged by the plaintiff company on daily basis and was paid according to trips run by him and was paid in cash. Charges were paid in cash to the driver after the trip in Gujarat. Truck was going on trip from L&T Crusher Plant at Kherwari in Gujarat to the location where Pillars were being constructed. The truck was carrying Aggregate (Rori/bajri). The load was approximately 38 Tons. At the time of accident, Mulayam (Driver) was in the truck and he informed about the accident. Mulayam was driving the vehicle. He did not know if anyone else was also present with him. The defendant company was informed of the accident immediately on the day of accident itself. He did not recall the day when survey was conducted by the defendant. The truck, on being released by the police, was taken for repair CS (COMM.)/105/2023 Page 19 of 49 -20- on 30.11.2021. The vehicle was still not repaired as it was irreparable being a total loss. The repair estimate was obtained from VG Automobiles, authorized Dealer of Eicher. The claim includes the expected business earnings by use of vehicle and the amount paid towards the EMI,without any earning from the truck and other expenses incurred in connection with the truck like insurance, documentation etc.
39. He further stated that in connection with the accident FIR, police has not made inquiries from the company but inquiry was made from the driver. He denied that the claim is exaggerated and false.
40. PW-2 stated in his cross-examination that he is Managing Partner of Global Impex, which is Partnership Firm registered in 2015 and he is partner since 2016 onwards.
He stated that the Firm is in business with the plaintiff company since end of 2020. He stated that he had knowledge about accident of the vehicle in question, but, he had no personal detailed knowledge about the facts of this case. His company received work orders from L & T where under for transportation of material, they engaged the plaintiff company for transportation purposes only. There was no written contract. Because of accident of the vehicle engaged by claimant, they had to re-deploy another transport through claimant in place of accidental vehicle, which took time. He could not tell the exact time but normally it takes 15 days. The truck was carrying bulk CS (COMM.)/105/2023 Page 20 of 49 -21- material (coarse aggregate and fine aggregate). He stated that he did not have any document to show any business loss for above mentioned 15 days.
41. DW-1, in her cross-examination, has admitted that she had not personally dealt with the present claim and had also not personally dealt with the underwriting of the insured vehicle, however, she voluntarily stated that they had separate department, which deals with the underwriting of the policy. She further admitted that at present, she had no record to show that the insurance policy along with its terms and conditions was sent to the insured, however, voluntarily stated that it is with the concerned department.
42. In her further cross-examination, the DW1 stated that as per Ex.P-2 available in the file, there were 3 pages of the policy and voluntarily stated that the terms and conditions are subsequently sent separately to the insured and are also available on the online portal of the insurance company. However, she admitted that they had not filed on record any document to show that policy terms and conditions were sent to the insured. She did not have any other proof to show that the letters Ex.DW-1/C, 1/D & 1/E were dispatched/sent to the insured, except photocopy of envelope filed with written statement (W.S.) at page No.207. It was also admitted by DW-1 that no proof of delivery has been filed. However, she denied the suggestion that these three letters were never dispatched and for that reason, no proof of dispatch has been placed CS (COMM.)/105/2023 Page 21 of 49 -22- on record. She stated that it is surveyor or the investigator, who might have submitted the report and thereafter only, they had issued the letter dated 04.01.2022. She also admitted that no report has been filed, on the basis of which, letters Ex.DW-1/C, 1/D & 1/E were dispatched by the company. She further admitted that one criminal case was registered by police in respect of the accident in question and charge-sheet has been filed by police against Sh. Mulayam Singh. She admitted not to have made any representation to the police that Mulayam Singh has been wrongly charge-sheeted as driver in the said accident.
43. She was not aware if any MACT claim had been filed by the injured or legal heirs of the deceased person. The license of Mulayam Singh might have been got verified by the concerned department of the defendant. It was also admitted by DW1 that the insured had provided the license of Sushil Kumar also. The verification of the license of Sh. Sushil Kumar might have been got carried by the concerned department.
44. She stated that the investigator has not provided them any document whereby they can affirm that Mulayam Singh has filed any protest petition challenging his impleadment as an accused in the case. They have been provided the claim form by the insured, wherein name of the driver has been mentioned as Mulayam Singh. She admitted that no exclusion clause has been mentioned in the repudiation letter dated 14.06.2022 (Ex.DW-1/E) and that Surveyor CS (COMM.)/105/2023 Page 22 of 49 -23- prepared the report on portal of the insurance company. She also admitted that format of the report was provided by their company to the Surveyor. She denied that IRDA regulation does not permit the insurance company to obtain surveyor report on its portal. She, however, denied the suggestion that reports of surveyor and investigator are false or fabricated or that the same have been obtained in order not to pay the legitimate claim of insured. She could not tell when the survey report was shared with the insured, however, she denied the suggestion that no survey report was shared with the insured and for that reason, no proof has been filed on record.
45. She admitted that they have never approached the police to inform that Sh. Pradeep was driving the vehicle and further investigation be carried out by the police. On being put specific question that there was no driver by the name of Sh. Pradeep, she admitted the same. She also admitted that they have not filed the estimate of repairs submitted by the insured.
46. However, she denied the suggestion that there is no violation of terms and conditions of the insurance policy and for that reason, no condition has been spell out in the repudiation letter. She also denied that the insured vehicle was total loss and claim has been wrongly denied by the defendant company.
CS (COMM.)/105/2023 Page 23 of 49 -24-47. DW-2 Sh. Hiral S. Patel, the Surveyor, in his cross-examination, stated that he was aware of the IRDA regulation. He was appointed as surveyor on 08.12.2021 for spot examination. He was not aware about the stage when he had examined the insured vehicle at the place of repairer at V.G. Automobile at Varodara, Gujarat. He admitted that in the report submitted by him with insurance company, the name of the driver has been mentioned as Mulayam Lal Bahadur at point 'A' on page 34 of Ex.DW-2/A and voluntarily stated that he had mentioned the name of the driver based on name mentioned in the Claim Form. He admitted no Claim Form has been attached with the report Ex.DW-2/A. He denied the suggestion that all the driver (sic as it should be 'name of the driver') have been recorded by him on the basis of information gathered from insured and driver. He admitted that the report Ex.DW-2/A has been prepared on portal of the insurance company and that in the entire report Ex.DW-2/A, there is no mention of the estimate of the repair submitted by the insured. He, however, voluntarily stated that he had submitted the estimate of repair alongwith his report to the insurance company, but, admitted that he nowhere mentioned in report Ex. DW-2/A about details of the documents which were provided to him during the process of the assessment of loss and that the report Ex.DW-2/A was submitted by him on 30.09.2022.
CS (COMM.)/105/2023 Page 24 of 49 -25-48. He deposed that the report Ex.DW-2/A was prepared after carrying out the repair of the vehicle by the insured. The re-inspection of the vehicle was carried out after completion of repairs by the insured. However, in response to specific question that till date, no repair had been carried out by the insured as the vehicle was total loss and was still lying in the same condition, he stated that he was not confirmed if, the report was prepared after re-inspection of the vehicle. He stated that he had carried out the spot and final survey. He was not confirmed on which date he carried out the final survey. He admitted that IRDA regulations do not permit them to prepare report on the portal of the insurance company and that he had not shared any report with the insured. He voluntarily stated that he had shared the assessment. He stated that he had carried out the assessment on the basis of estimate of repairs submitted by the insured, however, the same is not attached with Ex. DW-2/A. He stated that Ex.DW-2/A mentions the estimated value of parts and admitted that the estimate of repairs submitted by the repairers is not part of the report. He denied the suggestion that false report has been prepared by him at the instance of the insurance company to reduce the cost of repairs.
49. DW-3 Sh. Anjal Shah, Investigator, stated in his cross-examination that he was B.E. (Mechanical). He had submitted his report with the defendant company in original, but, admitted that original report has not been CS (COMM.)/105/2023 Page 25 of 49 -26- filed by the defendant.The format of investigation was provided by the defendant insurance company. The report was prepared at the portal of the insurance company. He stated that he was aware of the regulations of IRDA relating to Investigator. He admitted that there is no provision for appointment of investigator by the defendant company as per the IRDA regulations. He stated that he had verified the police record pertaining to the present accident i.e. FIR and Charge-sheet filed by the police, however, again said that Charge-sheet was not filed at that stage.The name of the accused in the present accident was put on the portal by the police. He had met with the Investigating Officer. He admitted that as per the Charge-sheet and Investigating Officer of Police, the driver was Mulayam Singh.
50. On being asked, had he obtained any certification of the weighbridge that Sushil was driving the vehicle, he answered in affirmative and stated he had obtained the weighment slip from L&T Construction. However, he admitted that it was a simple photocopy and it was not certified by any official of L&T. He denied the suggestion that said document is forged and fabricated, however, he voluntarily stated that it was obtained from the website of Gujarat Government made at weighbridge. He stated that after weighment of the vehicle, the driver may be changed. He voluntarily stated that at the time of investigation, the insured company did not represent any change of driver CS (COMM.)/105/2023 Page 26 of 49 -27- after the weighment. He stated that he was not aware if, any representation was made by insurance company to the Criminal Court/Police that he has been falsely implicated. He had not obtained any document from Mulayam Singh that he had made any representation to the police or to the Court that he was falsely implicated. He stated that he had not sought any permission in writing from L&T company for inspection of the records, however, voluntarily stated that he had made oral request for inspection of the record.
51. He did not obtain the driving license details of Sushil because he (Sushil) was away from his house. He admitted that in his report, he had also mentioned the name of driver as Mulayam Singh at point 'P' at page No.155 of Ex.DW-3/B. He denied the suggestion that he had not conducted any investigation and prepared false and fabricated at the instance of the defendant company on the portal of the defendant company as per their dictate.
52. Before proceeding to decide this issue, it is pertinent to note that during the course of final arguments, Sh. Navdeep Singh, Advocate representing the plaintiff company in this matter, stated at Bar, that the plaintiff company is confining/restricting its claim to the extent of Rs.46 lacs, being the sum assured, and is not pressing its claim to the extent of Rs.37,30,000/- on account of loss of business and Rs.2,75,000/- on account of parking charges as claimed in the plaint. In view thereof, claim of the plaintiff to the extent of amounts claimed under the head CS (COMM.)/105/2023 Page 27 of 49 -28- of loss of business and parking charges stands disposed off as not pressed for. Hence, the present suit survives only with respect to the claim to the extent of Rs.46 lacs being the sum assured against the insured vehicle.
ARGUMENTS OF PLAINTIFF:
53. Ld. Counsel of plaintiff has submitted that the insured/plaintiff was never provided with the terms and conditions of the insurance policy and this fact has been duly proved by the insured in the cross-examination of DW1, who has expressly admitted that there is no proof placed on record to show that the terms and conditions of the policy were provided to the insured by the insurer. Further, admittedly the police concerned had charge- sheeted Sh. Mulayam Singh, driver of the insured vehicle for the alleged accident and therefore, he submitted that there cannot be any doubt regarding the identity of the driver of the insured vehicle at the time of the accident, but despite that, the insurer had taken false ground for repudiating the claim of the insured while relying upon the reports of Surveyor and Investigator. Even otherwise, it is submitted that other driver namely Sh. Susheel Singh was also holding valid driving license to ply the insured vehicle, copy whereof was duly provided to the insurer. Further, it is submitted that original report of DW3 (Investigator) is also not on record. Further, it is also argued that the vehicle was total loss as cost of repair was more than 75% of the sum insured as per workshop's CS (COMM.)/105/2023 Page 28 of 49 -29- estimate, which was duly communicated to the insurer, which the insurer is liable to indemnify.
54. It is also argued by Ld. Counsel of plaintiff that DW2 (Surveyor) has admitted in his cross-examination that report was prepared by him on the portal of insurer and as per IRDA regulation, the surveyor is not required to prepare the report on the portal of insurance company and thus, it is submitted that the report cannot be termed as independent report. Further, he disputed the reports of Surveyor and Investigator on the ground that same are not in accordance with the Insurance Regulatory And Development Authority of India (Insurance Surveyors And Loss Assessors) Regulations, 2015 and relied upon Chapter IV thereof.
55. In support of his submissions, Ld. Counsel for plaintiff has also relied upon the following judgments:-
(i) "M/s Texco Marketing Pvt. Ltd. v. TATA AIG General Insurance Company Ltd. & Ors." Civil Appeal No. 8249 of 2022 of Hon'ble Apex Court with respect to his submission regarding exclusion clause;
(ii) "Sulakshna Devi Through Lrs v. Liberty Videocon General Insurance Company Ltd. & Ors ", First Appeal No.1155 of 2016, decided on 08-11-2023 passed by Hon'ble National Consumer Disputes Redressal Commission New Delhi with respect to CS (COMM.)/105/2023 Page 29 of 49 -30- submission regarding total loss of vehicle; and
(iii) "New India Assurance Co. Ltd. v. Pradeep Kumar "
reported as (2009) 7 SCC 787 with respect to submission that surveyor's report is not conclusive piece of evidence.
ARGUMENTS OF DEFENDANT
56. After referring to the pleadings of the parties, and the evidences led by respective sides during the course of trial, Ld. Counsel of defendant argued that the plaintiff company has failed to discharge the initial burden of proving this issue even to the extent of recovery of sum assured i.e. Rs.46 Lacs against the insured vehicle. For the said purpose, he submitted that the plaintiff company itself committed fundamental breach of the terms and conditions of the insurance policy by filing false claim and giving false information to the defendant company. In this regard, he has also referred and relied upon observation made by investigator in his investigation report dated 31-12-2021 [Ex.DW3/1], as also to the surveyor's report dated 30-09-2022 [Ex.DW2/1], appointed by the defendant company. He pointed out that as per claim raised by the plaintiff company, the insured vehicle was being driven by its driver namely Sh. Mulayam Singh, whereas, the said vehicle was, in fact, being driven by some other driver. Ld. Counsel of defendant also referred to the relevant portion of surveyor report, wherein it is stated that as per differ CS (COMM.)/105/2023 Page 30 of 49 -31- weigh bridge, the driver was Mr. Sushil, whereas, as per Lorry receipt, the name of the driver was Mr. Sandeep and as per verbal confirmation of Mr. Mulayam Singh, the name of the driver was Mr. Arvind. Based on said surveyor report, Ld. Counsel of the defendant vehemently argued that the plaintiff has failed to give any clarification on both the discrepancies regarding - spot of the accident and driver's name. He contended that the defendant company was justified in repudiating the claim of the plaintiff company as it had misrepresented and suppressed material facts from the defendant company while filing its claim. While referring to the judgment of Hon'ble Apex Court in case of "Isnar Aqua Farms. v. United India Insurance Co. Ltd." reported as 2023 SCC OnLine SC 945, he further submitted that insurance policy is founded on the principal of uberrima fides, i.e. 'good faith'. He urged that since the plaintiff was under an obligation and it was its bounden duty to act in fair manner and to give full details, its conduct in suppressing the material facts and misrepresenting the defendant company, disentitled it to raise any claim. Ld. Counsel of defendant has also relied upon judgment of Hon'ble Apex Court in case of "Narinder Singh v. New India Assurance Co. Ltd." reported as (2014) 9 SCC 324 in order to bring home his point that there should be no fundamental breach of the conditions contained in the contract of insurance policy. Therefore, he urged that this issue should be decided CS (COMM.)/105/2023 Page 31 of 49 -32- against the plaintiff company and in favour of the defendant.
ANALYSIS & FINDINGS
57. As already noted above, the initial burden of proving this issue was placed upon the plaintiff company. Further, as already noted above, the plaintiff has already confined/ restricted its claim to the extent of Rs.46 lacs, which is the sum assured, for total loss of insured vehicle and thus, the Court shall be confining its discussion only with respect to the said claim of Rs.46 lacs raised by the plaintiff company, while deciding this issue.
58. In view of what has been stated above, the testimony of DW2 namely Sh. Hiral Patel is of no relevance as of now. Hence, the Court is proceeding to discuss the testimonies of the relevant witnesses with respect to claim of Rs.46 lacs. For this purpose, the testimony of PW1 namely Sh. Daman Diwan is relevant. His testimony in detail has already been discussed hereinabove in the preceding paras of this judgment and thus, same is not being repeated herein for the sake of brevity. The said witness is found to have been consistent in his testimony even during the stage of cross-examination. He has deposed on the identical lines of the case set up by the plaintiff company in its plaint. Even during his cross-examination, he has reiterated that insured vehicle was being driven by its driver namely Sh. Mulayam Singh. He is found to have successfully CS (COMM.)/105/2023 Page 32 of 49 -33- withstood the litmus test of cross-examination. There is nothing on record, which may suggest that the defendant could impeach his testimony by way of litmus test of cross-examination. Rather, the fact of the matter is that not even a suggestion has been put on behalf of the defendant company to this witness that the insured vehicle was not being driven by Sh. Mulayam Singh or that the insured vehicle was being driven by some other driver. Virtually, the entire testimony of PW1 is found to have remained uncrossed from the side of the defendant on this material aspect as to who was driving the insured vehicle at the time of accident.
59. At the cost of repetition, it may be noted that the main defence raised by the defendant in its written statement has been that the plaintiff suppressed material facts and made misrepresentation that the insured vehicle was being driven by Sh. Mulayam Singh, and in fact, the said vehicle was being driven by some other driver. However, it is found by the Court that the defendant has not even put the said defence to PW1 during his cross-examination in any manner. It is trite law that relevant portion of the testimony of a witness, which remains unchallenged and uncrossed, gives rise to an inference that the opposite side has not disputed the same. Still, if any, authority is required then reference with advantage can be made to the judgments of Hon'ble Apex Court in case titled as "Muddasani Venkata Narsaiah v. Muddasani Sarojana," reported as AIR 2016 CS (COMM.)/105/2023 Page 33 of 49 -34- SC 2250 and "Arvind Singh v. State of Maharashtra"
reported as AIR 2020 SC 2451.
60. As against the above-discussed evidence of the plaintiff, the defendant has examined its AR as DW1. No doubt, the said witness has deposed on similar lines in terms of the defence raised by the defendant in its written statement, however, during his cross-examination, the plaintiff has duly established that the testimony of said witness does not inspire confidence and said witness is not trustworthy in the eyes of law. Reason is quite obvious that the said witness admitted during her cross-examination that she never personally dealt with the present claim and voluntarily stated that there is separate department, which deals with the underwriting of the policy. Not only this, she also admitted that there was no record to show that insurance policy along with its terms and conditions was sent to the insured i.e. the plaintiff company herein. Although, she claims that terms and conditions of the insurance policy was subsequently sent separately to the insured but she admitted that no document has been filed on record in that regard. Likewise, she also failed to produce any documentary proof regarding dispatch of letters dated 04-01-2022, 11-01-2022, 14-06-2022 [Ex.DW1/C to E] to the insured. She also admitted that no proof of delivery regarding receipt of either of the said 3 letters by the plaintiff, has been filed on record.
CS (COMM.)/105/2023 Page 34 of 49 -35-61. It may be noted that DW1 tried to explain that on receipt of report from the surveyor or investigator, the defendant had issued letter dated 04-1-2022 [Ex.DW1/C] but she admitted that no such report was filed on judicial record, on the basis of which, said letters were dispatched by the defendant company. Instead, this witness admitted that criminal case was registered with respect to accident in question and also that after completing investigation, the police has filed its final report/charge-sheet against driver namely Sh. Mulayam Singh. This admission on the part of the DW1 would lend credence to the case of the plaintiff company that the insured vehicle was in fact being driven by driver namely Sh. Mulayam Singh at the time of accident in question. This fact also stands fortified by further admission on the part of DW1 that the defendant company did not file any representation with the police that said Sh. Mulayam Singh was wrongly charge-sheeted as driver in the said accident. It is also important to note that DW1 further admitted that the insured (plaintiff herein), had provided not only driving license of Sh. Mulayam Singh but also of Sh. Sushil Kumar to the defendant and the defendant might have carried out verification of driving licenses of both the said drivers.
62. On the other hand, the investigator, whose report is heavily relied upon by the defendant, neither provide any document showing that either Sh. Mulayam Singh had filed any protest petition challenging his impleadment as CS (COMM.)/105/2023 Page 35 of 49 -36- an accused in the criminal case by the police, nor, there is any documentary evidence showing that the insured vehicle was actually being driven by some other driver at the time of accident. In fact, the defendant company as filed zerox copy of 'Detailed Accident Report' [DAR], which is Ex.DW2/A (Colly.). The same clearly demonstrate that the name of the driver in respect of the insured vehicle at the time of accident in question, is shown to be that of Sh. Mulayam Singh.
63. In this regard, the relevant portion of cross-examination of DW2 namely Sh. Hiral Patel is also relevant and thus, needs to be referred to. DW2 has admitted during his cross-examination that even in his report, he has mentioned the name of the driver of insured vehicle as Sh. Mulayam Lal Bahadur. Although, he claimed to have mentioned the said name on the basis of name of the driver as mentioned in the claim form but while his attention was drawn towards his report Ex.DW2/A, he admitted that no said claim form was attached with the said report.
64. As far as Survey's report is concerned, it is relevant to note that said surveyor report is not free from doubt as same is shown to have been prepared by the concerned surveyor against the relevant provision of Insurance Regulatory And Development Authority of India (Insurance Surveyors And Loss Assessors) Regulations, 2015. DW1 admitted during his cross-examination that surveyor was preparing report on the portal of insurance company i.e. defendant herein.
CS (COMM.)/105/2023 Page 36 of 49 -37-Further, she also admitted that format of the report has been provided by the defendant company to the surveyor. That being so, the act of the surveyor in preparing report on the portal of insurance company and also in preparing the report as per format provided to him by the insurance company, are very much contrary to the relevant provisions, more particularly the provisions contained in Chapter IV of the Insurance Regulatory and Development Authority of India (Insurance Surveyors And Loss Assessors) Regulations, 2015. Same are reproduced hereunder for the sake of convenience:-
"CHAPTER IV DUTIES AND RESPONSIBILITIES OF A SURVEYOR AND LOSS ASSESSOR
13. It shall be the duty of every Licensed Surveyor and Loss Assessor to Investigate, manage, quantify, validate and deal with losses (whether insured or mot) arising from any contingency, and report thereon to the insurer or insured, as the case may be. All Licensed Surveyors and Loss Assessors shall carry out the said work with competence, objectivity and professional integrity and strictly adhere to the code of conduct as stipulated in these Regulations.
(1) The following, shall, inter alia, be the duties and responsibilities of a Surveyor and Loss Assessor:-
(a) xxxx
(b) xxxx
(c) maintaining confidentiality and neutrality without jeopardising the liability of the insurer and claim of the insured;
(d) conducting inspection and re-inspection of the property in question suffering a loss;
(e) xxxx
(f) conducting spot and final surveys, as and when necessary and comment upon franchise, excess/under insurance and any other related matter;CS (COMM.)/105/2023 Page 37 of 49 -38-
(g) estimating, measuring and determining the quantum and description of the subject under loss;
(h) xxxx
(i) xxxx
(j) xxxx
(k) xxxx
(i) xxxx
(m) xxxx
(n) xxxx
(o) xxxx
(p) xxxx
(q) xxxx
(2) A surveyor or loss assessor whether appointed by insurer or insured, shall submit his report to the insurer as expeditiously as possible, but not later than 30 days of his appointment, with a copy of the report to the insured giving his comments on the insured's consent or otherwise on the assessment of loss.
Where, in special circumstances of the case, either due to its special and complicated nature, the surveyor shall under intimation to the insured, seek an extension, in any case not exceeding six months from the insurer for submission of his report.
(3) In cases where the Survey report is pending due to non completion of documents, the surveyor may issue the final survey report independently based on the available documents on record, giving minimum three reminders in writing to the insured.
(4) xxxx
(5) xxxx"
65. Further, there is nothing on record to show that the report of the said surveyor was ever shared either by the said surveyor or by the defendant company, with the plaintiff company at any point of time. Likewise, DW-2 has admitted that he had prepared his report on the portal of the insurance company i.e. defendant herein. He also admitted that he had nowhere mentioned about the details CS (COMM.)/105/2023 Page 38 of 49 -39- of documents provided to him during process of assessment of loss in his said report. He also admitted that IRDA regulations do not provide for preparation of report on the portal of insurance company. He further admitted not to have shared his report with the insured i.e. plaintiff herein.
66. As regards the submission made on behalf of plaintiff that surveyor's report is not conclusive piece of evidence, reliance is being placed on the decision of Hon'ble Apex Court in case of New India Assurance Co. Ltd. (supra), wherein it has been held as under:-
"In the said decision, it is no doubt held that though the assessment of loss by an approved Surveyor is a prerequisite for payment or settlement of the claim, the Surveyor report is not the last and final word. It is not that sacrosanct that it cannot be departed from and it is not conclusive. The approved Surveyor's report may be the basis or foundation for settlement of a claim by the insurer in respect of loss suffered by insured but such report is neither binding upon the insurer nor insured. On the said proposition, we are certain that there can be no quarrel. The Surveyor's report certainly can be taken note as a piece of evidence until more reliable evidence is brought on record to rebut the contents of the Surveyor's report."
67. In view of aforesaid discussion and the testimony of DW1 and DW2 as referred hereinabove, this Court does not hesitate to hold that the surveyor report Ex.DW2/A relied upon by the defendant company is in complete and clear violation of Chapter IV (supra) and thus, it cannot be looked into for the benefit of insurance company for any purpose whatsoever.
CS (COMM.)/105/2023 Page 39 of 49 -40-68. Although, the defendant company has also referred and relied upon the report of Investigator dated 31-12-2021 [Ex.DW3/B], however, said report is also liable to be discarded for the reasons already noted hereinabove while discarding the surveyor's report. DW3 i.e. the investigator appointed by the defendant company, has also admitted during his cross-examination that the format of investigation report was provided by the insurance company and also that the said report was prepared on the portal of the insurance company.
69. Moreover, it is relevant to note that original of Ex.DW3/B has not been produced by the defendant side throughout the trial, without which, the authenticity and genuineness of such report is always in doubt. Said document cannot be said to have been proved in accordance law of evidence due to non production of original thereof and thus, the objection regarding mode of proof of said document raised on behalf of plaintiff during chief-examination of DW3, is hereby allowed and it is held that said document cannot be read for the benefit of the defendant company.
70. Further, DW3 has admitted that as per charge-sheet and investigation conducted by the police, the name of the driver of the insured vehicle at the time of accident was Sh. Mulayam Singh. He claimed to have obtained weighment slip from LNT Construction but admitted that it was simple photocopy and was not even certified by any official of LNT Construction. He also admitted that it was CS (COMM.)/105/2023 Page 40 of 49 -41- not even downloaded copy from the portal /website of LNT Construction. That being so, it will not be safe for this Court to rely upon the said document, which is being heavily relied upon by the defendant company in order to dislodge the claim of the plaintiff company that insured vehicle was being driven by some other driver and not by Sh. Mulayam Singh.
71. Furthermore, it is relevant to note that DW1 has categorically admitted during her cross-examination that no exclusion clause has been mentioned in the repudiation letter dated 14-6-2022 (Ex.DW1/E). This is apart from the fact that the defendant has miserably failed to establish on record that said repudiation letter was in fact dispatched to the plaintiff, what to say of, proof of delivery thereof upon the plaintiff at any point of time.
72. As regards the absence of exclusion clause in the repudiation letter, Hon'ble Apex Court in case of M/s Texco Marketing Pvt. Ltd. (supra), has held as under:-
21. On a discussion of the aforesaid principle, we would conclude that there is an onerous responsibility on the part of the insurer while dealing with an exclusion clause. We may only add that the insurer is statutorily mandated as per Clause 3(ii) of the Insurance Regulatory and Development Authority (Protection of Policy Holder's Interests, Regulation 2002) Act dated 16.10.2002 (hereinafter referred to as IRDA Regulation, 2002) to the effect that the insurer and his agent are duty bound to provide all material information in respect of a policy to the insured to enable him to decide on the best cover that would be in his interest. Further, sub-clause (iv) of Clause 3 mandates that if proposal form is not filled by the CS (COMM.)/105/2023 Page 41 of 49 -42- insured, a certificate has to be incorporated at the end of the said form that all the contents of the form and documents have been fully explained to the insured and made him to understand. Similarly, Clause 4 enjoins a duty upon the insurer to furnish a copy of the proposal form within thirty days of the acceptance, free of charge. Any non-compliance, obviously would lead to the irresistible conclusion that the offending clause, be it an exclusion clause, cannot be pressed into service by the insurer against the insured as he may not be in knowhow of the same.
73. In the light of aforesaid discussion and the reasons noted hereinabove, this Court is of the considered opinion that the plaintiff has been successful in establishing its claim that the insured vehicle was being driven by Sh. Mulayam Singh at the time of accident in question and the defendant company has failed to establish that there was any misrepresentation or suppression of material facts from the side of the plaintiff company. Having said so, the irresistible conclusion which follows is that the defendant company has failed to prove even on the basis of preponderance of probability that there was any fundamental breach of terms and conditions of the insurance policy on the part of the insured i.e. plaintiff herein. For all these reasons, the judgments cited on behalf of defendant are entirely distinguishable from the facts and circumstances of the present case and thus, do not advance the stand taken by the defendant company. Further, this Court is also of the considered opinion that the plaintiff is entitled for reimbursement of the loss suffered by it, it being the admitted position on record that the vehicle was CS (COMM.)/105/2023 Page 42 of 49 -43- duly insured as on the date and time of the accident and there was valid insurance policy in force at that time.
74. This brings me down to the extent of loss suffered by the plaintiff company. It is the specific case of the plaintiff company that there was total loss caused to the insured vehicle and thus, the plaintiff is entitled to full amount of sum assured against the insured vehicle. On the other hand, the defendant company has claimed that the plaintiff has inflated the costs of repair of the insured vehicle, which according to the IRDAI loss valuator, is significantly lesser than what the plaintiff has been asking for. It is submitted that the insurance claim is a claim arising out of the contract of indemnity and thus, the plaintiff cannot be allowed to gain profit or benefit out of such contract by inflating claim value as was done in this matter. Hence, it is argued that insured is only entitled to claim the amount of actual damage that occurred and not the complete sum insured.
75. In order to appreciate the aforesaid plea raised on behalf of both the sides, it would be relevant to discuss the testimonies of the relevant witnesses for this purpose i.e. PW1 and DW1. It may be noted here that the PW1 has categorically deposed in Para No.6 of his affidavit in evidence Ex.PW1/A, that the extent of damage caused to the insured vehicle on account of the accident in question was more than 75% of the sum insured and despite that the defendant company to release the insurance amount. Not CS (COMM.)/105/2023 Page 43 of 49 -44- only this, he is found to have further deposed that the authorized repairer had given estimate of repair of Rs.43,50,084.46Paise to the plaintiff company and same was shared with the defendant company as well as the surveyor. He also deposed that the actual cost of repair would have been more than that and proved copy of such repair estimate as Ex.PW1/11, as also copy of e-mails exchanged between the parties as Ex.PW1/12 and the photographs of the insured vehicle as Ex.PW1/13. Pertinently, the defendant company has admitted Ex.PW1/12 and Ex.PW1/13 in its affidavit concerning admission/ denial of documents of plaintiff, as is available on record. As already noted above, the entire testimony of PW1 has gone unchallenged from the side of the defendant during his cross-examination as the defendant preferred not to put any question regarding extent of loss / damage caused to the vehicle on account of accident in question. Hence, such relevant portion of the testimony of PW1, being undisputed/ uncrossed from the side of defendant, tantamounts to admission of those facts on the part of the defendant company.
76. On the other hand, DW1 who is none else but AR of the defendant, admitted during her cross-examination that the defendant has not filed any estimate of repair submitted by the insurance company. As a matter of fact, the defendant has not filed any estimate of its repair in respect of the insured vehicle throughout the trial for the reasons best CS (COMM.)/105/2023 Page 44 of 49 -45- known to it. In case, the defendant is challenging the estimate of repair (Ex.PW1/11) showing the extent of loss / damaged suffered by the plaintiff, then it was then bounden duty of the defendant company to get the damage assessed through some independent assessor. Except the report of surveyor (Ex.DW2/A), no other document regarding the estimated cost of repair of the insured vehicle, has been filed by defendant in this case. Having failed to do so, an adverse inference is liable to be drawn against the defendant company that it had not filed any such estimate of repair, as same would have supported the case of the plaintiff.
77. As regards total loss, reliance is placed upon by the plaintiff on the judgment of Sulakshna Devi Through Lrs. (supra), wherein Hon'ble National Consumer Disputes Redressal Commission has held as under:-
The root of the issue in the present appeal lies 'whether there was Constructive Total Loss (CTL) of the subject vehicle or not'. The criteria for considering a vehicle as a CTL is "The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and/or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle". The estimate provided by the surveyor has assessed the cost of repair to be Rs. 8,33,586.00 which comes out to be about 36.75%. However, the said estimate of the surveyor was after adjusting depreciation value. If the depreciation amount is excluded then the estimate will come to Rs.17,51,479.81 which would be about 77.22%. The concept of depreciation is adjustment of notional value which deducts value of an asset over its life. However, in the present appeals the actual cost that would have to be paid for repairs would be about 77.22% out of which the Insurance Company by its CS (COMM.)/105/2023 Page 45 of 49 -46- own estimate was willing to pay only 36.75%. It cannot be denied that the vehicle has suffered CTL as per the definition even if the Insurance Company is adjusting for depreciation. It is a matter of fact that vehicle would require extensive repairs and the Insurance Company cannot by way of depreciation deprive the insured of his rightful claim as the actual cost of repair that would have to be paid is not subject to depreciation, i.e. the workshop would require the same amount irrespective of the age of the vehicle.
78. The facts of the present case are squarely covered by the ratio of law discussed by Hon'ble NCDRC in the above referred decision. No other judicial precedent laying down any contrary proposition of law, has either been cited or brought to the notice of this Court from the side of the defendant company. Hence, in view of the foregoing reasons, the discussion made hereinabove and while being guided by the above referred decision of Hon'ble NCDRC, it is held that the plaintiff is entitled to recover the full insured amount of Rs.46,00,000/- from the defendant company, while taking the damage caused to the insured vehicle to be more than 75% of IDV and thus, it is treated that there was complete loss to the insured vehicle due to the accident in question. This issue stands decided in these terms.
ISSUE NO.2
79. Now, I shall decide the issue no.2 in respect of interest, which reads as under:-
Issue no. (ii) - Whether the plaintiff is entitled for any interest ? If so, at what rate and for CS (COMM.)/105/2023 Page 46 of 49 -47- which period ? OPP
80. Section 34 CPC clearly provides that where the liability in relation to the sum so adjudged had arisen out of commercial transaction, the rate of such further interest may exceed 6% per annum but shall not exceed the contractual rate of interest, or where, there is no contractual rate, the rate at which moneys are lent or advanced by nationalized banks in relation to the commercial transactions.
81. Although, Ld. Counsel of defendant submitted that the plaintiff is not entitled to claim any interest, since the present claim arises out of insurance policy based upon the principal of uberrima fides, i.e. 'good faith', however, the said submission is liable to be rejected for the reason that it has been duly established on record that it was the commercial vehicle which was got insured by the plaintiff with the defendant and the defendant / insurer had deprived the plaintiff from getting its legitimate dues in the form of reimbursement of the amount of damage / loss suffered by it, by repudiating its claim without any rhyme or reason. It is trite law that no one can be allowed to enrich itself at the cost of other without any justifiable ground or reason. The plaintiff had submitted its claim immediately after the date of accident i.e. 21.11.2021, but the defendant company kept on delaying the matter regarding the said claim and ultimately repudiated the said claim vide letter dated 14-06-2022 i.e. after a period of 7 months or so. Even thereafter, the defendant has been CS (COMM.)/105/2023 Page 47 of 49 -48- contesting the present suit tooth and nail. Keeping in view the above discussion, in my opinion, it has been established that in the case in hand, there was commercial transaction between the parties and thus, the plaintiff is entitled to be awarded pendente lite and future interest.
82. Nevertheless, it may be noted that the plaintiff has claimed interest @ 18% per annum. Indisputably, there is no contractual agreement between the parties to pay interest @ 18% per annum as claimed. Hence, claim of interest at the said rate appears to be on higher side as it is no more the banking rate of interest prevalent during the relevant period. Court is of the view that the interest of justice shall be met by awarding statutory interest @ 12% p.a. in favour of the plaintiff and against the defendant from date of filing of the suit till date of its realization. In these terms, the issue no.2 is decided in favour of the plaintiff and against the defendant.
83. The plaintiff has also claimed the cost of the suit. Keeping in view the provisions contained in Sections 35 and 35A CPC, it has been established that the defendant failed to pay the outstanding dues not only despite service of legal notices, but also, despite service of summons of the suit upon it. Therefore, the defendant is responsible for the cost of the litigation to the extent of court fee and lawyers fee etc. as per the relevant rules. In my view, the plaintiff is accordingly entitled for the cost of litigation against the defendant.
CS (COMM.)/105/2023 Page 48 of 49 -49-RELIEF
84. In the light of the aforesaid discussion, Court is of the view that the plaintiff has been/has not been able to prove his case on the basis of preponderance of probability. The suit is decreed in favour of the plaintiff and against all the defendants and thus, the following reliefs are granted:-
(i) The plaintiff is entitled to recover Rs.46,00,000/ [Rupees Forty Six Lacs only] from the defendant;
(ii) Pendente lite interest is awarded @ 12% per annum from the date of filing of the suit till the date of judgment;
(iii) Future interest is awarded @ 12% per annum from the date of judgment till the date of its realisation; and
(iv) Cost of the suit is also awarded in favour of the plaintiff.
85. Decree sheet be prepared accordingly.
86. File be consigned to Record Room, after due compliance.
Digitally signedAnnounced in the open Court by VIDYA PRAKASH On 22nd Day of October, 2024. VIDYA Date: PRAKASH 2024.10.22 17:16:41 +0530 (VIDYA PRAKASH) DISTRICT JUDGE (COMMERCIAL COURT)-02 PATIALA HOUSE COURTS, NEW DELHI CS (COMM.)/105/2023 Page 49 of 49