State Consumer Disputes Redressal Commission
United India Insurance Co. Ltd. & ... vs Jagdev Singh on 21 May, 2024
ADDITIONAL BENCH
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.41 of 2022
Date of institution : 20.01.2022
Reserved on : 03.05.2024
Date of decision : 21.05.2024
1. United India Insurance Co. Ltd., Kotkapura Road, Bagha Purana
District Moga, through its regional office i.e. U.I.I.C., 136, Feroze
Gandhi Market, Ludhiana through Assistant Manager (L) Shama
Arora Mittal.
2. United India Insurance Co. Ltd., Head Office 24, Whites Road,
Chennai through its regional office i.e. U.I.I.C. 136, Feroze Gandhi
Market, Ludhiana through Assistant Manager (L) Shama Arora
Mittal.
.....Appellants/Opposite Parties
Versus
Jagdev Singh (aged 26 years) son of Sh. Amarjit Singh, R/o H.No.1316,
Ward No.13, New Parwana Nagar, Moga, District Moga at Present
locked in Modern Jail, Faridkot.
....Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 26.10.2021 passed by the District
Consumer Disputes Redressal Commission,
Moga.
Quorum:-
Mr. H.P.S. Mahal, Presiding Judicial Member
Mrs. Kiran Sibal, Member Argued by:-
For the appellants : Sh. Lalit Garg, advocate
For respondent : Sh. Anand Kaushal, Advocate
KIRAN SIBAL, MEMBER
The instant appeal has been filed by the appellants/opposite parties against the impugned order dated 26.10.2021, passed by FA No.41 of 2022 2 District Consumer Disputes Redressal Commission, Moga (in short, "the District Commission"), whereby the complaint filed by complainant against opposite parties (in short 'OPs'), under the Consumer Protection Act, was partly allowed and the following relief has been granted:
"In view of the aforesaid facts and circumstances of the case, we allow the complaint of the complainant partly and direct the opposite parties to make the payment of Rs.9,55,500/-( Rupees nine lakh fifty five thousands five hundred only) i.e. 70% of the Insured Declared Value (IDV) of Rs.13,65,000/- to the complainant along with interest @ 9% per annum from the date of repudiation of the claim i.e. 07.09.2018 till its actual realization. Opposite parties are also directed to pay the lump sum compensation to the complainant to the tune of Rs.10,000/- (ten thousands only) on account of harassment, mental tension and litigation expenses."
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Brief facts for the disposal of the appeal are that the complainant got insured his vehicle i.e 'Scorpio S10 7 STR', bearing Registration Certificate No.PB29Z-9711, from the OPs vide insurance policy No.201204311/7P108863830, which was valid for the period w.e.f. 21.09.2017 to 20.09.2018 having Insured Declared Value of Rs.13,65,000/-. Unfortunately, on 11.05.2018, when the complainant along with his friend Nirmal Singh, who was driving the insured vehicle, were coming from Jalandhar to Ludhiana. When they reached near PAP Gate No.2 Jalandhar Cantt, the insured vehicle met with an accident and was damaged badly. The said accident had occurred due to sharp lights of a bus coming from the opposite side and there was no fault of any other person or vehicle. The complainant got registered the FA No.41 of 2022 3 DDR regarding the alleged accident with police authorities at Jalandhar. Thereafter, the vehicle in question was brought at Moga after toeing from Rama Mandi (which is near to PAP Gate No.2, Jalandhar) to Moga on 12.05.2018. But at Moga, there was no authorized service centre of Mahindra, as such, the damaged vehicle was brought to its authorized service centre at Dada Motors, Ludhiana. The said authorized service centre made the inspection of the damaged vehicle and assessed the loss caused to accidental vehicle to the extent of Rs.13,99,619/-. As the assessed amount was more than the Insured declared value of the vehicle in question i.e. Rs.13,65,000/-, therefore, it was declared as 'Total Loss' and accordingly, the complainant lodged the claim of his damaged vehicle with the OPs. Thereafter, the OPs appointed a surveyor, however, they repudiated the claim of the complainant on the false and frivolous grounds of violation of the terms and conditions of the insurance policy. The complainant further alleged that he never breached any terms and conditions of the policy in question, moreover the same were never supplied to him. As such, the alleged terms and conditions, particularly the exclusion clause of the policy in question is not binding upon the complainant. The vehicle in question was being used by the complainant for earning his livelihood and there is no other vehicle with the complainant except the present one, hence there is no question of driving the vehicle in question as taxi. The complainant further stated that since the date of accident, the damaged vehicle was lying with 'Dada Motors', Ludhiana for its repair and as the OPs had repudiated the claim of the complainant, the said workshop was raising the demand of parking charges of the damaged vehicle to the tune of FA No.41 of 2022 4 Rs.1000/- per day. Alleging deficiency in service on the part of the OPs, the complaint filed consumer complaint before the District Commission and sought directions against the OPs to pay Rs.13,65,000/- i.e. the IDV of the vehicle, Rs.50,000/- as compensation for mental tension and harassment, Rs.20,000/- as litigation expenses and to pay the damages on account of parking charges to the tune of Rs.1,000/- per day from the date of accident till its realization and another other relies which may deem fit in the interest of justice.
4. Upon notice, the OPs appeared and contested the complaint and filed their written reply, wherein they raised certain preliminary objection, which are not required to be reproduced here for the sake of brevity. On merits, it was not disputed that the vehicle in question was insured with the Opposite Parties for the period w.e.f. 21.09.2017 to 20.09.2018 and it was also not disputed that the vehicle met with an accident on 11.05.2018 near PAP Gate No.2 Jalandhar. The OPs further stated that upon receipt of intimation of loss to the insured vehicle, they immediately appointed the surveyor to investigate the matter and assessed the loss. The surveyor assessed the loss to the extent of Rs.8,49,500/-, however on further investigation, it was found that the complainant runs a business of tours and travels and was having many vehicles. The complainant sent a paid driver to drop some passengers to Jalandhar, which shows that the vehicle was being used as Taxi. The said fact was concealed by the Complainant from the OPs, thus he had violated the conditions No.5 and 6 of the insurance policy, due to which the OPs repudiated the claim of the Complainant vide letter dated 07.09.2018 as per the FA No.41 of 2022 5 insurance policy terms and conditions. The policy documents alongwith terms and conditions of the insurance policy were supplied to the Complainant at the time of the insurance policy and hence, there was no deficiency in service on the part of the Opposite Parties. After denying the other averments made in the complaint, the OPs prayed for dismissal of the complaint .
5. The parties led their evidence before the District Commission in respect of their respective contentions. The District Commission after going through the record and hearing learned counsel for the parties, partly allowed the complaint of the complainant, vide impugned order as above. Aggrieved with the same, present appeal has been filed by the appellants /OPs.
6. We have heard learned counsel for the parties and have also gone through the written arguments submitted by them and have perused the record of the case.
7. Learned counsel for the appellants/OPs has vehemently contended that the impugned order passed by the District Commission suffered from patent illegalities, glaring infirmities and the same has further been rendered in utter disregard to the facts and circumstances of the instant case. The District Commission has failed to appreciate the fact that the respondent/complainant had not come with clean hands and is guilty of suppressing the material facts. The complainant runs a business of tour and travels and the vehicle in question was also being used as a Taxi. The contract of insurance is of utmost good faith but the respondent/complainant had concealed the said facts from the FA No.41 of 2022 6 insurance company and thus violated the terms and conditions of the policy. The District Commission has not considered the report of the surveyor, wherein he assessed the loss caused to the vehicle to the tune of Rs.8,49,500/- and no reason has been given for not considering the same. The District Commission has failed to appreciate the fact that the report of the surveyors is based on correct facts as they have vast experience in this field and they make their report, after taking into consideration all the pros and cons of the case. In support of his contentions the learned counsel relied on the judgment of Hon'ble Apex Court and Hon'ble National Commission in the case tittled as 'Sri Venkatshwar Sindikat Vs. OIC', II(2010) CPJ 1 (SC) and 'Narinder Kumar Joshi Vs. Reliance General Insurance Co. IV 2017 CPJ 366 (NC). The learned counsel further argued that as per the terms and conditions of the insurance policy, in case of total loss, the damaged vehicle becomes the property of the insurance company, therefore, the respondent/complainant is liable to transfer the RC in the name of the insurance company and to handover the wreckage/debris of the damaged vehicle to it. The learned counsel further argued that the respondent/complainant, has also concealed the fact from the District Commission as well as from the appellants/OPs that he had purchased the insured vehicle after taking loan from Canara Bank, Branch Chupkiti, District Moga and the vehicle has been hypothecated by him in favour of Canara Bank. Now, the bank has filed the recovery suit against the respondent/complainant as well as the appellants/insurance company for recovery of the loan amount by sale of insured vehicle, which becomes the property of the insurance company, in the case of FA No.41 of 2022 7 total loss. The learned counsel prayed that directions be given to the respondent/complainant to get the NOC from the Canara Bank and hand over the same to appellants for the settlement of amount awarded by the District Commission. The learned counsel further argued on the similar lines as stated in the written reply and prayed for acceptance of the appeal.
8. On the other hand the learned counsel for respondent/complainant has contended that there is no perversity and illegality in the impugned order passed by the District Commission. The learned counsel further argued that the respondent/complainant was using his insured vehicle for his personal use and at the time of accident there was no passenger in it except the respondent and his friend Nirmal Singh, who was driving the vehicle. The appellants/OPs have failed to prove on record that the vehicle was being used as Taxi. The learned counsel further argued on the similar lines as stated in the complaint and prayed for dismissal of the present appeal.
9. We have given thoughtful consideration to the contentions raised by the parties.
10. Admitted facts of the case are that the respondent/complainant got insured his vehicle i.e 'Scorpio S10 7 STR', bearing Registration Certificate No.PB29Z-9711, from the appellants/OPs vide insurance policy No.201204311/7P108863830, Ex.C-3, which was valid for the period w.e.f. 21.09.2017 to 20.09.2018 having Insured Declared Value of Rs.13,65,000/-. It is also not in dispute that the vehicle in question met with an accident during the subsistence of the policy period. The respondent/complainant alleged FA No.41 of 2022 8 that the vehicle was completely damaged in the accident but the appellants/OPs failed to settle the claim and illegally repudiated the genuine claim, vide repudiation letter dated 07.09.2018, Ex. C-7, on the ground of violation of the terms and conditions of the insurance policy. Alleging deficiency in service, the respondent/complainant filed a consumer complaint before the District Commission, which has been partly allowed vide impugned order as above. Aggrieved by the same the appellants/OPs filed the present appeal.
11. The foremost contention raised by the learned counsel for the appellants/OPs is that the District Commission has failed to appreciate the fact that the insured vehicle was being used by the respondent/complainant as a 'Taxi' as he runs a business of Tours and Travels and further he hired a paid driver to drop some passengers to Jalandhar, which resulted in violation of the terms and conditions of the insurance policy qua limitation as to use. On the other hand, the case of the respondent/complainant is that he was using the vehicle in question for his personal use and at the time of accident, there was no passenger in the vehicle except the respondent and his friend Nirmal Singh, who was driving the vehicle. To determine this controversy, we have perused the pleadings as well as evidence placed on record by the parties. A perusal of insurance policy schedule, Ex. C-3, shows that the vehicle in question was duly insured under the 'Private Car Package Policy' issued in the name of respondent-Jagdev Singh and the IDV of the vehicle is mentioned as Rs.13,65,000/-. The case of the appellants/OPs is that after investigating the matter, they came to know about the fact that the vehicle was being used as a Taxi. In support of FA No.41 of 2022 9 their version, they relied upon the report of investigating agency, Ex. OP-4. However, from the perusal of the said report, it reveals that the finding of the said agency is merely based on oral submissions. The said agency has failed to procure any statement/affidavit of any person/witness in support of its finding. In support of its finding that "the respondent/complainant was using his vehicles i.e. Innova, Alto, Indica & Scorpio Vehicle in question as Taxi', the investigator placed on record a visiting card, Ex. OP-9, wherein it has been mentioned that Jagdev Dhaliwal and Hardev Dhaliwal, were doing their business under the name "Brother Tour & Travels". But the appellants/OPs have failed to place on record any cogent evidence in the shape of any Registration Certificate or any other document to establish that the respondent/ complainant was also having other vehicles except the insured vehicle. The appellants/OPs have also contended that the insured vehicle was being driven by a paid driver at the time of accident. However, in support this contention, they have failed to prove on record any document in the form of his salary slip, bank account statement or otherwise etc. to establish that the driver was being paid by the insured. The respondent/complainant has categorically stated in his complaint as well as in his affidavit that he was only having the vehicle in question and the same was used for earning his livelihood. Accordingly, in the absence of any cogent evidence, the version of the appellants/OPs that the insured vehicle was being used for commercial purpose and was being driven by a paid driver, is not tenable. Accordingly, we are of the considered opinion that the insured vehicle was being used in accordance with "Limitation as to use" as per the terms and conditions FA No.41 of 2022 10 of the policy and was duly entitled for insurance claim lodged by him with the appellants/Insurance company. However, the District Commission by relying on the judgments of the Hon'ble Apex Court in the case of 'Amalendu Sahoo Vs. Oriental Insurance Company Limited', as well as judgment of Hon'ble National Commission in the case of 'National Insurance Co. Ltd. Vs. Kamal Singhal', held that the insurance company can indemnify the claim of the complainant upto the extent of 70% of IDV on 'Non Standard basis' which comes to Rs.9,55,500/-. Since, the observation given by the District Commission with regard to liability of the Insurance Company upto the extent of 70% on 'Non Standard Basis' has not been challenged by the complainant, the same attains finality.
12. Another contention raised by the appellants is that the District Commission has not considered the report of the surveyor, wherein he assessed the loss caused to the vehicle to the tune of Rs.8,49,500/- and no reason has been given for not considering the same. It has also been submitted that whenever a loss is reported by the insured, a loss adjuster, popularly known as loss surveyor, is deputed who assesses the loss and issues report known as surveyor report, which forms the basis for consideration or otherwise of the claim. Surveyors are appointed under the statutory provisions and they are the link between the insurer and the insured when the question of settlement of loss or damage arises. We have perused the impugned order passed by the District Commission and no doubt, nothing has been stated in the impugned order qua not considering the loss to the tune of Rs.8,49,500/- assessed by the surveyor, but from the bare FA No.41 of 2022 11 perusal of estimate prepared by the authorized service centre, Ex.C-6, it shows that the estimate cost of repair was Rs.13,99,619/- which was much beyond the Insured Declared Value i.e. Rs.13,65,000/-. Since the repair cost of the vehicle is higher than the IDV of the vehicle, which shows that the vehicle is beyond repair and to be considered as total loss, therefore, the claim was required to be settled accordingly. We agree that surveyors are generally appointed under the IRDAI guidelines and are the best persons to find the basis of settlement of the claim between the parties but in certain cases the report of the surveyor is not binding on insured/insurer if there are some flaws in it and lacking any evidence and basis of settlement. Reliance has been placed upon the judgment of the Hon'ble Supreme Court reported in (2009) CPJ 46 (SC) titled "New India Assurance Company Limited v. Pardeep Kumar" wherein it has been laid down that surveyor's report is not the last and final word. It is not that sacrosanct that it cannot be departed from; it is not conclusive. The approved surveyor's report may be basis or foundation for settlement of a claim by the insurer in respect of the loss suffered by the insured but surely such report is neither binding upon the insurer nor insured. Accordingly, we do not find any force in the contention raised by the appellants/OPs and the same is hereby rejected.
13. So far as the contention raised by the appellants/OPs, that as per the terms and conditions of the insurance policy, in case of total loss, the damaged vehicle becomes the property of the insurance company, therefore the respondent/complainant is liable to transfer the registration certificate in the name of the insurance company and to FA No.41 of 2022 12 handover the wreckage/debris of the damaged vehicle to it, is concerned, we are of the considered opinion that as discussed above, the total estimated cost of repair exceeds the IDV and it is case of total loss of the insured vehicle, therefore, the registration certificate is to be got transferred in the name of Insurance company by the respondent/complainant from the registering authority. The respondent/complainant is required to obtain the NOC from the Canara Bank with whom the vehicle has been hypothecated and further to execute the requisite documents, in favour of appellants/Opposite Parties, for transfer of the vehicle, in question, in their name, so as to vest them with the ownership thereof. The appellants/OPs are also entitled to receive/collect the wreckage/debris of the damaged vehicle, therefore they are at liberty to collect the same from Dada Motors, Ludhiana, after paying the parking charges. The said aspect has been overlooked by the District Commission, while passing the impugned order. Hence, the impugned order is required to be modified to that extent only.
14. Sequel to the above, the appeal is partly allowed and the order of the District Commission is modified to the extent that:-
i) The respondent/complainant is directed to obtain the NOC from the Canara Bank and further to execute the requisite documents, in favour of appellants/Opposite Parties, for transfer of the vehicle, in question, in their name.
ii) The appellants/OPs are at liberty to receive/collect the wreckage/debris of the damaged vehicle from the Dada Motors, Ludhiana after paying the parking charges, if any, to it.FA No.41 of 2022 13
iii) It is also made clear that since the vehicle in question is under hypothecation in the name of Canara Bank, therefore, the bank has the lien over the claim amount upto the extent of outstanding loan amount. Hence, the insurance Company is directed first to pay the awarded amount to Canara Bank and remaining amount, if any, is payable to the respondent/complainant.
iv) Remaining part of the impugned order qua awarded amount, interest and compensation shall remain intact.
15. The appellant has deposited a sum of Rs.6,28,471/- at the time of filing of the appeal. This amount alongwith interest, which has accrued thereon, if any, shall be remitted by the registry to the District Commission forthwith. The concerned parties may approach the District Commission for the release of the above amount and the District Commission may pass the appropriate order in this regard after the expiry of limitation period in accordance with law.
16. The appeal could not be decided within the stipulated period due to heavy pendency of Court cases.
(H.P.S. MAHAL) PRESIDING JUDICIAL MEMBER (KIRAN SIBAL) MEMBER May 21, 2024 (Dv)