Delhi District Court
Rajiv Bhatt vs Royal Sundaram General Insurance Co Ltd on 5 February, 2022
+IN THE COURT OF SH. GURDEEP SINGH
DISTRICT JUDGE (COMMERCIAL COURT)-02
WEST DISTRICT, TIS HAZARI COURTS, DELHI.
In the matter of:-
CNR No: DLWT01-001561-2021
CS (Comm): 134/2021
Rajiv Bhatt
s/o. Sh BD Bhatt
r/o. A-6/246, Paschim Vihar
New Delhi-110063 ....... Plaintiff
VERSUS
Royal Sundaram General Insurance Co Ltd
Rider House, Plot No. 136
Sector-44, Gurugram-122001 ....... Defendant
Date of Institution : 20-02-2021
Date of reserving order : 31-01-2022
Date of pronouncement of order : 05-02-2022
JUDGMENT
1. Vide this judgment, I shall decide present suit for recovery of Rs. 44,14,633/- alongwith pendente lite and future interest @12.05% per annum.
2. The case of the plaintiff is that the plaintiff is a businessman and is owner of vehicle bearing Regn NO. DL 01CQ-3386. The defendant is an insurance company and they approached the plaintiff to extend the coverage of the vehicle and before extending the coverage got the vehicle inspected from its authorized agents and after satisfying regarding the value of the CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 1/ 16 vehicle agreed to extend the coverage and worked out the premium which was paid by the plaintiff to the defendant company. As per the Insured Declared Value(IDV), in case of total loss of the vehicle the defendant was bound to pay the sum insured. The defendant company issued policy bearing NO. 1002986000100 for a period w.e.f. 07-07-2018 to 06-07-2019. It is further stated that the vehicle was comprehensively insured covering all sorts of risks and has extended the coverage for a total sum of Rs. 36,48,457/-. It is further stated that the vehicle was damaged in an accident and since there was no third party injuries, no FIR was registered, however photographs of vehicle was taken. This fact was notified to the defendant on 02-07-2019 and the surveyor opined that the vehicle is total loss and beyond repairs. It is further stated that despite providing documents to the surveyor to assess the loss, the surveyor submitted the report dated 30-07-2019 stating that IDV is on higher side. It is further stated that in the month of August 2019, plaintiff was notified that they had appointed Sh. BP Mehta for investigation of the claim and the said appointment was contrary to IRDA Regulations. It is further stated that the defendant company obtained favourable reports from the surveyor and the investigator in order not to pay the legitimate claim to the plaintiff. Thereafter vide letter dated 04-10-2019, the defendant company repudiated the claim of plaintiff relying on the 'Condition No. 1' of the policy which states Notice shall be given in writing to the company immediately upon the occurrence of any accidental loss or damage in the event of any CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 2/ 16 claim and thereafter the insured shall give all such information and assistance as the company shall require. It is further stated that the defendant company has overlooked the law and guidelines of IRDA in this regard. It is stated that the accident took place in the late night of 01-07-2019 and the same was notified on 02-07-2019 and surveyor visited the workshop on 03-07-2019. It is further stated that the plaintiff approached the Hon'ble Ombudsman, however, since the Hon'ble Ombudsman had no jurisdiction to entertain the complaint about Rs. 30 Lakhs so the complaint was returned. Therefore, it is stated that the defendant company is liable to pay interest @18% per annum on the sum insured i.e. Rs. 7,66,176/ w.e.f. 01-08-2019 till 31-09-2020 upon the principal amount of Rs. 36,48,457/-. It is further averred that dispute is commercial in nature and the transaction took place in Delhi at the residence of the plaintiff at Paschim Vihar, hence this Court has territorial jurisdiction to try the suit. Hence, the present suit has been filed before the Court.
3. Summons of the suit was issued to the defendant vide order dated 20-02-2021 for 13-05-2021. However, hearing in the matter could not take place on account of outbreak of pandemic and in pursuant of directions of Hon'ble Supreme Court of India and Ld Principal District & Sessions Judge, West, the matter was adjourned en bloc for 26-08-2021 and on that day counsel on behalf of defendant appeared and filed written statement.
4. Since both the parties had agreed that the vehicle was damaged and has not disputed this fact and also have not disputed the CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 3/ 16 insurance policy, therefore, it was agreed that the matter can be decided by way of argument as only legal issue has arisen between the parties.
5. Defendant in their written statement, stated that the dispute is under the contract of insurance on submission of proposal which is signed by the plaintiff. It is further stated that the IDV is not the value of vehicle agreed by defendant but is given by the proposer for calculation of the insurance premium payable by him. It is further stated that the vehicle is not total loss but is repairable and subject to the terms and condition of the policy, the amount recoverable would not exceed the amount of loss as assessed by the surveyor. It is further stated that the IDV is Rs. 36,48,457/- and the amount of loss assessed is Rs. 20,74,888.31. Further, defendant company has denied that the vehicle was comprehensively insured covering all sorts of risks infact the motor insurance policy is a named risks policy. It is further stated that the plaintiff has failed to disclose the date and time of accident and also who had photographed the vehicle and also failed to place the same on record. It is further stated that the plaintiff failed to inform them before removing the vehicle from the spot of accident. It further that the claim has been repudiated on specific grounds. It is further stated that the damages on the vehicle do not appear to be resulted from the reported accident. Further it is stated that the suit is devoid of cause of action and is liable to be dismissed.
6. Plaintiff filed replication to the written statement wherein it is CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 4/ 16 stated that the defendant has wrongly repudiated the claim of plaintiff. Further it is stated that no terms and conditions were provided at the time of issuance of the policy. Plaintiff has denied that the IDV was provided by him for calculating the premium. It is further stated that the surveyor has also stated in the report that the assessment of the loss is based on inspection of insured car before dismantling and the actual repair cost may rise on account of several other parts which may be damaged but are not visible. Therefore it is stated that the loss worked out was correct. Further it is stated that the condition No. 1 relates where theft had taken place and the policy was subsisting when the vehicle met with accident.
7. In support of his claim, plaintiff has filed various documents including renewal of the policy(Online), the same shows the IDV as 34,66,062/- and renewal premium as Rs. 1,37,568/-; complaint made to the PCR by the plaintiff on 01-07-2019 and the time is mentioned as 16:31:41 from phone Number 9818452184 and the report was recorded vide GR No. 94A at PS Nihal Vihar; NCR report is also filed in this regard; letter dated 29-07-2019 of defendant addressed to plaintiff regarding appointment of investigator Sh BP Mehta to investigate the claim; letter dated 18-08-2019 of Sh BP Mehta awaiting the spot photographs; letter dated 04-10-2019 of defendant company refusing the claim as the plaintiff did not give the clarifications sought by them and investigator and violating the condition No. 1; surveyor report dated 30-07-2019; Damage CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 5/ 16 claim form; Insurance policy valid from 07-07-2018 to 06-07-2019;GST Invoice.
8. The defendant in their affidavit of admission and denial of documents have admitted all the documents of the plaintiff except the proposal form and call record & DDR.
9. Thereafter, vide order dated 22-11-2021 issues was framed:
(1) Whether the plaintiff is entitled to decree for a sum of Rs. 44,14,633/-?OPP (2) Whether plaintiff is entitled to interest, if yes, at what rate and for what period?OPP (3) Relief
10. I have heard Ld counsels for the parties and have also gone through the record. Written submission was also filed on behalf of parties.
11. It is relevant to quote from the policy document the terms and conditions.
Section I is relating to loss of or damage to the private car insured.
'The company will indemnify the insured against loss or damage to the private car insured hereunder and/or its accessories whilst thereon
(i)by fire explosion self ignition or lightning;
(ii)by burglary housebreaking or theft;
(iii)by riot and strike;
(iv)by earthquake(fire and shock damage);
(v)by flood typhoon hurricane storm tempest inundation cyclone hailstorm frost;
(vi)by accidental external means;
(vii)by malicious act;
CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 6/ 16
(viii)by terrorist activity;
(ix)whilst in transit by road rail inland-waterway lift elevator or air;
(x)by landslide rockslide Subject to deduction for depreciation Sum Insured -insured's declared value(IDV) The insured's declared value of the private car will be deeded to be the sum insured for the purpose of this policy which is fixed at the commencement of each policy period for the insured private car. The IDV of the private car (and accessories if any fitted to the private car) is to be fixed on the basis of the manufacturer's listed selling price of the brand and model as the private car insured at the commencement of insurance(renewal and adjusted for depreciation) as per schedule. The schedule of the age- wise deprecition as shown below is applicable for the purpose of total loss/constructive total loss(TL/CTL) claims only.
AGE OF THE % OF DEPRECIATION FOR
PRIVATE CAR FIXING IDV
Not exceeding 6 months 5%
Exceeding 6 months but 15%
not 1 year
Exceeding 1 year but not 20%
2 year
Exceeding 2 years but 30%
not 3 year
Exceeding 3 years but 40%
not 4 year
Exceeding 4 years but 50%
not 5 year
IDV of vehicles beyond 5 years of age and of obsolete models of the vehicle(i.e. models which the manufacturers have discontinued to manufacture) is to be determined on the basis of an understanding between the insurer and the insured. IDV shall be treated as the Market Value throughout the policy period without any further depreciation for the purpose of total loss/constructive total loss claims. The insured private car shall be treated as CTL if the aggregate cost of retrieval and/ or repair of the private car, subject to terms and conditions of the policy, exceeds 75% of the IDV of the private car. CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 7/ 16
12. Now I proceed to decide the suit issuewise.
ISSUE No. 1: Whether the plaintiff is entitled to decree for a sum of Rs. 44,14,633/-?OPP
13. In order to claim the amount of Rs. 44,14,633/- plaintiff has relied upon the insured amount which is Rs. 36,48,457/- and the interest @18% per annum upon the said amount as Rs. 7,66,176/- w.e.f. 01-08-2019 till 31-09-2019. The insurance policy has also been placed on record which reflect the said insured amount.
14. The claim of the plaintiff has been resisted primarily on two grounds. One that the insurance policy has been repudiated by defendant on Condition No. 1 and secondly that the claim amount of the entire loss of the vehicle is not admissible as it was not total loss of the vehicle case as the surveyor has estimated the same to be less than 75% value of the declared insured value of the vehicle.
15. Ld counsel on behalf of plaintiff has cited recent judgment of Hon'ble Supreme titled as Kamlesh vs. Shriram General Insurance Co Ltd reported as Civil Appeal No. 8796 of 2019 wherein the same standard condition No. 1 was in question before the Hon'ble Supreme Court on the basis of which the insurance policy was repudiated by the insurance company. The Hon'ble Supreme Court while analysing the said condition held that the intimation of the accident which occurred during the intervening night of 1st and 2nd June 2009 which was given on CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 8/ 16 3rd June 2009, it was not delayed and it had satisfied the required contemplated condition of the policy and set aside the view taken by the National Consumer Disputes Redressal Commission which had reduced the claim to 60% of IDV value of the vehicle. Ld counsel has further cited another judgment of Hon'ble Supreme Court titled as Gurshinder Singh vs. Shriram General Insurance Co Ltd reported as Civil Appeal No 653 of 2020 wherein there was delay in informing the insurance company after theft had occurred. The Hon'ble Supreme Court held that since the insured had lodged the FIR immediately after theft of the vehicle and the police after the investigation filed the final report and found the claim of theft of vehicle to be genuine then the mere delay in intimating the insurance company about the occurrence of theft of vehicle cannot be ground to deny the claim of the insurance. It is worthwhile to mention that there was delay of 52 days in intimating after the vehicle was stolen, Hon'ble Supreme Court held that the insurance company cannot take shelter of the condition of mere delay of 52 days when the FIR regarding theft of vehicle was already lodged.
16. In the present case, the police control room mentions 1 st July, 2019 as the date of accident and vehicle number is given and the police found vehicle in accidental condition. The information was also recorded in General Dairy, copy of general dairy as well as the form of Delhi Police Control Room is also filed. Although the same has been denied by the defendant in CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 9/ 16 the admission and denial of documents but the denial is not a specific denial as required under the Commercial Court Act. These documents are official documents bearing the endorsement of police received under RTI Act, therefore, it cannot be denied and deemed to have been admitted. The vehicle is stated to have been met with accident in the intervening night of 1st and 2nd July and as per the surveyor's report the vehicle was inspected by the surveyor on 3rd July 2019 at the car garage at Faridabad. As per the law, laid down by Hon'ble Supreme Court, the insurance company cannot take shelter on the ground that timely intimation was not given and it was not immediate. I am of the opinion that there was no delay in intimating about the accident to the insurance company and therefore, denial of the claim on the basis of Condition NO. 1 is not tenable. Further as per the letter of insurance company, the policy was repudiated on the ground that the insured did not co- operate. The exchange of eMail between the insured/plaintiff and insurer/defendant shows that surveyor has asked for various documents including invoice, call detail record, fuel filling bill etc which are to my mind is not germane to assess the damage and are irrelevant. Therefore it cannot be said that there was non- co-operation.
17. The second objection to the claim is that the vehicle was not total loss and hence the amount of the insured's declared value(IDV) is not admissible. And that the insured declared value was higher than the market value and the contract is that CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 10/ 16 of indemnity and the claim cannot be granted of more than the actual loss. The present policy is a private car package policy where the schedule for fixing the IDV of a private car is given and in the package policy the value of the vehicle is determined as per the depreciation schedule provided in standard policy by the insurance company. As per the insurance policy the year of the manufacture of the vehicle was 2013 and the date of registration was 22-10-2013 and the vehicle was insured from 07-07-2018 to Midnight 06-07-2019 meaning thereby that the vehicle was not more than 5 years old when the vehicle was insured and the insured's declared value was in accordance with the schedule involving 40% depreciation and therefore whatever amount was declared it was as per the schedule and therefore now it cannot be questioned that the market value was less than the IDV.
18. The insurance company cannot turn around and say that the IDV of car was more than the market value. They are bound by the value on which they had received the premium.
19. Now the next question is whether it is case of total loss of the vehicle, so that plaintiff is entitled to entire declared value of the vehicle?
20. It is worthwhile to mention that as per the terms and conditions, IDV be treated as market value throughout the policy period without depreciation for the purpose of total loss. The surveyor report Annex D3 has given the assessment of vehicle repair as Rs. 20,74,888.31. The said service station has given the service CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 11/ 16 quote as Rs. 32,56,604.18. It is one of the condition of the policy if the repair cost increases more than 75% of the IDV, it will be taken as total loss of the vehicle. If we take the value as given by the Regant Garage Private Limited, it is indisputably more than 75% of the IDV and it becomes the case of total loss. However, the surveyor on the basis of the quotation given by the service center has made the assessment of the loss which come around Rs. 20,74,888.31 which is not 75% of IDV as the IDV of present vehicle was Rs. 36,48,457. Ld counsel on behalf of plaintiff has submitted that it is case of total loss and cited judgment of Hon'ble National Consumer Commission titled as General Manager HDFC Ergo General Insurance Co Ltd vs. Venkata Ramesh Dabbara II(2019) CPJ-141 wherein it was observed by Hon'ble National Consumer Commission that the company showroom has assessed the damage to the vehicle to the tune of Rs. 30,96,081/- and according to the surveyor's report the repair cost would be Rs. 7,16,713/- and the vehicle was valued as Rs. 16,00,000/- and the declared insured's value was Rs. 12,42,500/-. Since the assessed value exceeds 75% of the IDV, the damage was considered to be total loss. Hence, there was no illegality and infirmity in the order of the State Commission which took the IDV towards total loss of the vehicle. Ld counsel further cited judgment of Hon'ble Supreme Court titled as New India Assurance Company Limited vs. Pradeep Kumar reported as (2009) 7SCC 787 wherein in a special appeal the order passed by the Hon'ble National Consumer Commission was challenged. The Hon'ble Supreme CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 12/ 16 Court analysed Section 64-UM(2) of the Act, 1938 and observed that the assessement of loss by the approved surveyor is pre-requisite for payment or settlement of claim of twenty thousand rupees or by the insurer. To quote:
Section 65-UM(2) of the Act, 1938 '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 less assessor(hereinafter 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.'
21. In the light of the law laid down, coming to the report of the report of the surveyor regarding the damages, the estimate of the surveyor was not the final word, let us examine what is the basis of the report of surveyor wherein he has calculated the repair cost as Rs. 20,74,888/-. The surveyor's report Annex D3 which clearly mentions that "the assessment of loss is worked out on the basis of his inspection of the insured vehicle in the garage and estimate raised is attached with report for ready reference." "Assessment of loss is based on the inspection of the vehicle before the dismantling and the actual repair cost may rise on account of several other parts which may be CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 13/ 16 damaged but are not visible." The garage which is Regant Automobile, Faridabad which appears to be authorized service center for Audi car which has given the estimate for repair. On the perusal of the assessment of the damage made by the surveyor, the surveyor in most of the items agrees with the estimate given by the service center except for some items which he is not disputing and only mentions "to check", which appears to be meant by him to be checked after the vehicle is dismantled.
22. For example, the item manifold which is costing Rs. 35998/-;
hose costing Rs. 9064.41; PAN1 and PAN2 estimating cost of Rs. 15,000/- and Rs. 18,000/- Approx is mentioned "to be checked". The variance in the cost as given by the service center and by the surveyor only occurs on account of many items for which the cost is given by the service center but the same are left in the estimate by the surveyor as to be checked. Apart from this there is difference of the labour cost which comes to Rs. 86,730/- as estimated by the surveyor but it is estimated as Rs. 1,50,000/- by the service center.
23. The surveyor has deliberately not estimated some of the parts which would have to be dismantled but one is well aware that most of those parts would also have been damaged given the extensive damage caused to be vehicle as for example, the surveyor has not estimated the value of the Hose and Fan, the parts which almost to the certainty would have been damaged given the extent of damage to the car. Therefore, I am of the CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 14/ 16 opinion that it will be more than 75% of IDV and it will be a case of total loss and hence, the defendant is liable to pay the insured's declared value.
ISSUE NO. 2: Whether plaintiff is entitled to interest, if yes, at what rate and for what period? OPP
24. Now coming to the interest. Plaintiff has claimed interest @18% per annum from the date when the damage is caused which appears to be on higher side. The interest at the rate of 12% per annum is reasonable in the given facts and circumstances of the case. Accordingly, plaintiff is entitled to interest @12% per annum from the date of refusal of the claim till the filing of the suit. Thereafter the plaintiff is also entitled to interest pendent lite @12% per annum from the date of filing of suit till the date of order. Further, plaintiff is also entitled to future interest @12% from the date of order till the date of realization.
RELIEF
25. As discussed above, I am of the opinion that plaintiff is entitled to recover IDV from the defendant i.e. Rs. 36,48,457/-. Plaintiff is entitled to interest @12% per annum from the date of refusal of the claim till the filing of the suit. Further, plaintiff is also entitled to interest pendent lite @12% per annum from the date of filing of suit till the date of order. Further, plaintiff is also entitled to future interest @12% from the date of order till the date of realization.
CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 15/ 16
26. Accordingly suit is decreed in favour of the plaintiff and against the defendant with actual cost of suit and fee of the advocate which is assessed to Rs.22,000/-. Pre-institution mediation fees be also added to the cost. Decree sheet be prepared accordingly.
Digitally signedAnnounced in open court by GURDEEP
GURDEEP SINGH
today i.e. 05-02-2022 SINGH Date: 2022.02.05
14:21:08 +0530
(GURDEEP SINGH)
DISTRICT JUDGE (COMMERCIAL COURT)-02
WEST DISTT:THC:05-02-2022
CS (Comm.) No: 134/2021 Rajiv Bhatt vs. Royal Sundaram General Insurance Co Ltd 16/ 16