State Consumer Disputes Redressal Commission
Amit Singh Brar S/O Sh. J.S. Brar vs M/S National Insurance Company Ltd. on 29 April, 2010
2nd Bench STATE CONSUMER DISPUTES REDRESSAL COMMISSION, PUNJAB, SCO NOS.3009-12, SECTOR 22-D, CHANDIGARH. First Appeal No. 233 of 2004 Date of institution : 27.2.2004 Date of Decision : 29 .4.2010 Amit Singh Brar s/o Sh. J.S. Brar, resident of Brar Complex, G.T. Road, Moga. .Appellant. Versus 1. M/s National Insurance Company Ltd. through its Divisional Manager, Divisional Office, G.T. Road, Moga. 2. National Insurance Company Ltd. through its Regional Manager, Regional Office, SCO No. 332-334, Chandigarh. Respondents. First Appeal against the order dated 28.1.2004 of the District Consumer Disputes Redressal Forum, Moga. Before:- Lt. Col. Darshan Singh (Retd.), Presiding Member.
Shri Piare Lal Garg, Member.
Present:-
For the appellant : Sh. P.K. Kataria, Advocate For the respondents :
Sh. Mirgank Sharma, Advocate for Ms. V.A. Talwar, Advocate PIARE LAL GARG, MEMBER:
This is an appeal filed by Amit Singh Brar-complainant(in short, the appellant) against the order dated 28.1.2004 of the District Consumer Disputes Redressal Forum, Moga(in short the District Forum) by which the complaint of the appellant was dismissed by the District Forum.
2. Brief facts of the case are that previously Himmat Singh was owner of Truck/Tanker bearing Registration No. PAR-9050 and the same had met with an accident on 26.1.2001. At the time of accident, the truck was insured with the respondents, as such, the claim was settled for Rs. 1,85,000/-. Later the said truck was purchased by the appellant in September, 2001 after getting its value re-assessed at Rs. 5,75,000/- from one Pyara Singh, Surveyor on 8.4.2001. The said truck was insured with the respondents for the period from 9.4.2002 to 8.4.2003 for Rs. 575000/-. The same was over-turned and met with an accident on the way from Yamuna Nagar to Gurgaon on 18.5.2002. The vehicle was burnt and totally damaged. FIR dated 19.5.2002 was lodged at Police Station, Farukhabad, Distt. Gurgaon. Claim was lodged with the respondents. Surveyor was appointed by the respondents, who conducted the spot survey and submitted his report dated 26.6.2002. The truck was totally damaged. Thereafter, one Mr. Arora, another Surveyor was appointed to assess the loss of the vehicle, who did not listen the appellant nor submitted his report. Later vide letter dated 2.5.2003, the respondents offered an amount of Rs. 2,75,000/- on the basis of report of Mr. Arora. This amount was not accepted by the appellant as the value of the vehicle was assessed as Rs. 5,95,000/- by Surveyor Pyara Singh and the vehicle was also insured by the appellant with the respondents for Rs. 5,75,000/-. The grouse of the appellant was that the truck was totally damaged, as such, he was entitled for the full insured amount of Rs. 5,75,000/-. The allegation of the appellant was that the offer given by the respondents was without application of mind. Alleging deficiency in rendering services, appellant had filed the complaint with the prayer that the respondents may be directed to pay the full insured amount of Rs. 5,75,000/- alongwith 12% per annum interest from 18.5.2002 and also prayed compensation of Rs. 50,000/- and Rs. 15,000/- as litigation expenses.
3. Respondents replied by taking preliminary objections that the vehicle had been used for commercial purposes as such, the appellant was not consumer and the complaint was not maintainable. It was admitted that the appellant had owned the truck and the same was insured with the respondents for the period from 9.4.2002 to 8.4.2003. It was also admitted that the truck was met with an accident on 18.5.2003 and Sh. S.K. Miglani was appointed as surveyor. Later Mr. Arora of Delhi was appointed for final report of the damages/loss, who recommended an amount of Rs. 2,75,000/- on the basis of total damage. The stand of the respondents was that at the time of accident, the truck was over-loaded exceeding 10% of the permissible load, as such, the appellant was only entitled for 75% of the damage.
Salvage of the vehicle was assessed as Rs. 1 lac, as such, an offer for Rs.
1,04,750/- without deposit of salvage with the respondents was offered to the appellant as per rules but the appellant refused to accept the same. It was pleaded that the claim of the appellant was not repudiated and the complaint was pre-mature. Any deficiency in rendering service on their part was denied and dismissal of the complaint was prayed for.
4. Learned District Forum after hearing the learned counsel for the parties and going through the record, dismissed the complaint on the ground of maintainability.
5. Hence, the appeal.
6. We have gone through the pleadings of the parties, perused the record of the District Forum and heard the arguments of the learned counsel for the parties.
7. Complaint of the appellant was dismissed by the District Forum on the sole ground that the District Forum had no jurisdiction to entertain and decide the complaint as the truck in dispute was purchased by the appellant for commercial purpose, as such, he does not come under the definition of consumer.
8. This submission of the learned counsel for the respondents has no force because it is not the case of the appellant that he had bought any goods from the respondents. His case is that he had hired and availed the services of the respondents for a consideration. The exclusionary clause for commercial purposes as inserted in Section 2(1)(d)(i) for the goods is not applicable in the case of services. It was held by this Commission in case United India Insurance Company Limited and another Versus M/s Associated Road Carriers Ltd., 1998(1) CLT 437 that :-
Commercial purpose The exclusionary clause for commercial purposes as inserted in Section 2(1)(d)(i) for the goods is not applicable in the case of services.
9. There is only dispute between the parties whether the amount of loss to the tune of Rs. 2.75 lacs of the truck in dispute assessed by Sh. K.R. Arora, Loss Assessor and Valuer is correct or not?
10. Counsel for the respondents submitted that the Loss Assessor had rightly assessed the loss of the insured truck to the tune of RS. 2.75 lacs after inquiring value of the vehicle from the market as well as from Mr. Parvinder and Mr. Amit. The report of the Loss Assessor is very exhaustive and he has given the full details to assess the loss of the burnt vehicle insured with the respondents. Counsel for the respondents also submitted that the respondents had offered the above amount to the appellant but he had not accepted the same and the respondents are still ready to pay the same as per the report of the Loss Assessor.
11. On the other hand, counsel for the appellant submitted that the loss assessor had not assessed the correct market value of the vehicle which was at the time of accident. The vehicle was insured for Rs. 5,75,000/- vide insurance policy Ex. A-19. At the time of insurance of the vehicle in dispute, the Assistant Administrator Officer of the respondents had physically inspected the vehicle and after assessing the value/price of the vehicle, the same was insured by the Assistant Administrator Officer correctly for the amount of Rs. 5,75,000/- and accepted the premium of Rs. 13,018/- from the appellant. The report of the Loss Assessor is not correct and not based on evidence from where he had inquired the price/value of the vehicle and what was the basis, on which he had assessed the value of RS. 2,75,000/- of the vehicle in dispute. The report of the Loss Assessor is vague.
12. We have gone through the report of the Loss Assessor Ex. R-3 and the basis of the assessment of loss is given in his report by the Loss Assessor is reproduced as under:-
ASSESSMENT ON TOTAL LOSS BASIS:
The vehicle in question is Tata Diesel vehicle of 1988 Model. It is fitted with a tank which was in good condition. The vehicle and the tank put together are insured for Rs. 5,75,000.00. We have enquired from the market value of the vehicle and the maximum value of a 1998 Model Truck and a very good Tank on it made in 2001 is Rs. 2,75,000.00. The enquiries regarding the value were made from the following persons dealing in such type of vehicles:-
1. Mr. Parvinder having Mobile No. 9810190998.
2. Mr. Amit having Mobile No. 9811821556.
In view of the above market value the insurers liability is Rs. 2,75,000.00. In terms of the policy the insurers liability is the insured value or market value which ever is less. In this case the market value is less than the insured value and therefore, the market value viz. Rs. 2,75,000.00 becomes the insurers liability on Total Loss Basis.
SALVAGE VALUE:
We have shown the damaged / burnt vehicle to a few salvage purchasers and have negotiated the value with them and the maximum offer received is Rs. 1,00,000.00. Therefore, incase the company desires to settle the claim on Net of Salvage Loss Basis the insurers liability is as under subject to otherwise the claim falls within the purview of policy.
ASSESSMENT ON TOTAL LOSS BASIS - Rs.
2,75,000.00 LESS : COST OF SALVAGE - Rs.
1,00,000.00 = = = = = = = = = = = = = Rs.
1,75,000.00 = = = = = = = = = = =
13. The very basis of the assessment of the value in dispute is based on the inquires from Mr. Parvinder having Mobile No. 9810190998 and Mr. Amit having Mobile No. 9811821556 but no address of the above mentioned persons had been given by the Loss Assessor in his report nor the type of their business was mentioned in his report for the assessment of the value of the vehicle in dispute. No statement was recorded by the Loss Assessor of said Mr. Parvinder and Mr. Amit from whom he had allegedly inquired the market value of the vehicle.
14. There is no dispute that the truck was insured with the respondents for the period of 9.4.2002 to 8.4.2003 for Rs. 5,75,000/- and the same met with an accident on 18.5.2002 i.e. only after 1 month and 9 days and totally burnt. The respondents had assessed the market value of the truck only Rs. 2,75,000/- on total loss basis minus Rs. 1,00,000/- as the cost of the salvage, total Rs. 1,04,750/- was offered by the respondents to the appellant against the insured amount of Rs. 5,75,000/- as per report of the Surveyor-cum-Loss Assessor as the liability of the respondents was limited to the extent of 75% of the assessed amount of Rs. 1,75,000/-.
15. We are unable to understand as to how and on what basis the Surveyor has assessed the market value of the vehicle in question as Rs. 2,75,000/-. Admittedly, this is a case of total loss and then how the Surveyor could ascertain the market value without the opinion of such persons, having seen/inspected the vehicle. The surveyor has stated in his report under the heading of assessment of loss on total loss basis that he inquired from Sh. Parvinder and Sh. Amit regarding the market value of the vehicle in question. But no address of the above persons was mentioned by the Surveyor in his report nor the type of their business is mentioned in his report. The Surveyor has not checked up the market value of the vehicle in question from the sale/purchase dealers of 2nd hand vehicles in the market of Moga. It is also not the case of the Surveyor that he has checked any vehicle of the similar condition from any person, who was doing the business of 2nd hand/accidental vehicles. No detail has been given of any dealer from whom he had inquired the market value of the vehicle in question.
16. The version of the counsel for the respondents is that the market value assessed by the Surveyor should be upheld. No evidence has been produced by the respondents so as to uphold the market value of the vehicle assessed by the Surveyor-cum-Loss Assessor.
17. There is no dispute that the vehicle in question was also inspected by Sh. Piara Singh, Surveyor and Loss Assessor on 8.4.2001 on the instructions of the respondent i.e. D.O. Moga and he had assessed the value of the vehicle approximately Rs. 5,95,000/-. The respondents had accepted the value of the vehicle as Rs. 5,75,000/- on 9.4.2002 and insured the vehicle after accepting the premium of Rs. 13,018/- from the appellant. It could not be accepted that the value of the vehicle depreciated/decreased/ reduced to the tune of Rs. 2,75,000/- on 18.5.2002 only after 1 month and 9 days. We are unable to accept this contention of the respondents. The insurance companies often act in an unreasonable manner after having accepting the value of particular insured goods, when the companies are called upon to pay the compensation. The attitude of the respondents is clearly unwarranted, not only as being bad in law but ethically indefensible. The respondents were bound by the value put on the vehicle while renewing the policy on 9.4.2002 after accepting the premium for the insurance of the vehicle.
18. It is held by the Honble Supreme Court of India in case Dharmendra Goel versus Oriental Insurance Co. Ltd. III (2008) CPJ 63 (SC) that:-
Section 2(1)(c) Motor Vehicles Act, 1988 Section 146, 196 Insurance Motor Accident Claim Depreciation Value of vehicle on date of insurance accepted at Rs. 3,54,000/- - Accident took place with seven months on insurance Value depreciated from Rs. 3,54,000 to Rs. 1,80,000 Complaint dismissed by District Forum Allowed in appeal Inadequate compensation, on cash loss basis awarded by State Commission Revision against order partly allowed Insurer directed to pay loss assessed by Surveyor on cash loss basis Civil appeal filed Insurer often acts unreasonably, after having accepted value of particular insured goods, disowns that very figure on one pretext or other Attitutde bad in law, ethically indefensible Company bound by value put on vehicle while renewing policy Vehicle used for seven months Value reduced by Rs. 10,000/- - Insurer liable to pay Rs. 3,44,000 with interest.
(ii) Principle of Law Compensation Court must take realistic view Compensation if possible on material on record, should not be denied on hyper technical pleas.
19. It was also held by the Honble Supreme Court of India in case New India Assurance Company Ltd. versus Pradeep Kumar, 2009 CTJ 599 (Supreme Court( (CP) that:
Insurance-Deficiency in service-Consumer Protection Act, 1986-Section 2(1)(g)-Section 2(1)(o)-Vehicle, insured with the appellant, met with an accident when it fell down into a khud 300 ft. deep below the road-Respondent claimed Rs. 1,58,409/- from the insurer towards the expenses incurred for repairing the vehicle and the interest paid to a bank for obtaining loan for making payment to the repairer-Insurer offered him only Rs. 63,771/- based on the assessment of the damage by the surveyors-District Forum accepted the complaint directing the insurer to pay him Rs. 1,58,409/- alongwith interest @ 12%-Insurer challenged the District Forums order before the State Commission but without any success-It also failed before the National Commission which affirmed the concurrent orders of the Forums below-Therefore, the present appeal-Held that the surveyors report is not the last and final word for settling an insurance claim-It is, not that sacrosanct or conclusive that it cannot be departed from-Appeal dismissed being devoid of any substance.
20. The vehicle was insured for Rs.
5,75,000/- on 9.4.2002 and the accident happened after 1 month and 9 days only. Some depreciation in the value of the vehicle ought to be made, as such, we are of the view that the value of the vehicle should be reduced by 10% of the insured amount.
21. We accordingly, allow the appeal and direct the respondents to pay sum of Rs. 5,75,000/- minus Rs. 57,500/-(10%) = total Rs. 5,17,500/-, if the appellant deposit the salvage of the truck in question with the respondents. However, if the appellant not deposit the salvage then the respondents will be liable to pay Rs. 5,17,500/- minus Rs. 1,00,000/- i.e. Rs. 4,17,500/- with interest @ 7.5% per annum after four months from the date of accident i.e. 18.5.2002 till payment.
22. The arguments in this appeal were heard on 27.4.2010 and the order was reserved. Now the order be communicated to the parties.
23. The appeal could not be decided within the statutory period due to heavy pendency of Court cases.
(Lt. Col. Darshan Singh [Retd.]) Presiding Member April 29, 2010. (Piare Lal Garg) as Member