State Consumer Disputes Redressal Commission
Icici Lombard General Insurance ... vs Gurpal Singh, on 10 March, 2008
IN THE STATE COMMISSION:DELHI IN THE STATE COMMISSION: DELHI (Constituted under Section 9 of The Consumer Protection Act, 1986) Date of Decision: 10-03-2008 Appeal No. FA-08/62 (Arising out of Order dated 07-12-2007 passed by the District Forum ( New Delhi), K.G. Marg, New Delhi, in Complaint Case No. 1241/2005) ICICI Lombard General Insurance Company Limited, Through Manager (Legal), 5th Floor, 25-Birla Towers, Barakhamba Road, New Delhi 110001. . . . Appellant Versus Mr. Gurpal Singh, S/o. Shri Man Singh, R/o. 1365-C, Gali No.8, Govindpuri, Kalkaji, New Delhi. . . . Respondent CORAM: JUSTICE J.D. KAPOOR, PRESIDENT MS. RUMNITA MITTAL, MEMBER
1. Whether Reporters of local newspapers be allowed to see the judgment?
2. To be referred to the Reporter or not?
Justice J.D. Kapoor (Oral)
1. Respondent insured his vehicle with the Appellant-Insurance Company for a sum of Rs. 2,49,597/- against the risk of damage due to accident or theft. Admittedly, the vehicle met with an accident and suffered damage. The appellant-Company appointed Surveyor who assessed the loss at Rs. 50,000/- However, the respondent was not offered the said amount and consequently was forced to file the present complaint before the District Forum seeking indemnification of the loss.
2. Vide impugned Order dated 07-12-2007 the District Forum allowed the complaint with the following directions to the appellant-Company:-
i) O.P. shall pay Rs. 50,000/- to the complainant towards the damage caused to the car as a result of the accident.
ii) O.P. wrongfully rejected the claim and was deficient in service and for causing wrongful loss and mental agony, the O.P. shall pay Rs. 15,000/- to the complainant as compensation.
iii) O.P. shall pay Rs. 5,000/- towards cost of litigation to the complainant.
3. Through this appeal, the impugned Order has been assailed mainly on the ground that the District Forum has not taken into account the actual loss assessed by the Surveyor to the tune of Rs. 21,549/-, and has referred to a table.
There is no independent report of the Surveyor filed by the appellant-Company. According to the appellant-Company this is the only report wherein the actual loss was assessed at 36,153/- and after depreciation for the parts, the actual claim worked out to Rs. 21,549/-.
4. The case of the respondent before the District Forum in brief was that he purchased a second hand Indica Car No. DL 3CU 1055, financed by ICICI Bank, from one Narender Singh for Rs. 2,19,597/-. It was also insured by the Appellant-Company.
The finance was to the tune of Rs. 1.00 Lac and the remaining amount was paid by the respondent from other sources. The respondent kept on paying Rs. 5010/- as monthly instalment of the said loan, though one such cheque for EMI had bounced which was not intentional.
On 17-02-2005 when the respondent was heading towards Nehru Nagar from ISBT, near Nehru Nagar Fly Over, all of a sudden one cow appeared in front of the vehicle and while avoiding a collision the vehicle swerved and hit a truck damaging the left side of the car badly. A police report to this effect was made on 18-02-2005 and the Appellant was also informed. Appellant-Company appointed Surveyor who assessed the damage at Rs. 50,000/- and thereafter the respondent preferred a claim with the Appellant-Company.
However, since the appellant-company drastically reduced the claim amount and refused to pay the amount as assessed by the Surveyor the respondent filed the instant Complaint before the District Forum.
5. Though the appellant did not take the plea as to the assessment of loss by Surveyor to the tune of Rs. 50,000/- but contested the complaint on the ground that the respondent had given inconsistent version as to the accident, as before the appellant-Company he stated that he himself was driving the car but in the complaint before the police he stated that somebody else was driving the car and further that the respondent was not having a valid driving license and therefore he was not entitled to the claim or compensation.
6. However, all the aforesaid pleas were rightly rejected by the District Forum on the premise that these pleas are based on conjectures and surmises, particularly when the appellant-company never asked the respondent to produce the driving license and how can it now blame that the respondent was not having a valid driving license, though the appellant-company had sought the particulars of the person who was driving the car.
7. A perusal of the impugned Orders shows that the Surveyor had estimated the damage to the vehicle of the respondent at Rs. 50,000/-.
8. Had the Surveyor not assessed the loss at Rs. 50,000/-, the respondent would have not said so and would have rather produced the entire bills of repairs of the vehicle which may be more than Rs. 50,000/-.
9. In terms of Sec. 14 (1)(d) of the Consumer Protection Act, 1986, every consumer is entitled to an amount as compensation as to the actual loss or injury suffered by him due to the negligence of the O.P. The word compensation has been provided a very wide connotation by the Supreme Court which encompasses in its fold each and every element of suffering, mental agony, harassment, expenses incurred for getting the rightful claim etc. The Supreme Court has accepted this concept of compensation in case after case and recently in Ghaziabad Development Authority Vs Balbir Singh-(2004) 5 SCC 65, in the following terms:-
The word compensation is of a very wide connotation. It may constitute actual loss or expected loss and may extend to compensation for physical, mental or even emotional suffering, insult or injury or loss. The provisions of the Consumer Protection Act enable a consumer to claim and empower the Commission to redress any injustice done. The Commission or the Forum is entitled to award not only value of goods or services but also to compensate a consumer for injustice suffered by him. The Commission/ Forum must determine that such sufferance is due to malafide or capricious or oppressive act. It can then determine amount for which the authority is liable to compensate the consumer for his sufferance due to misfeasance in public office by the officers. Such compensation is for vindicating the strength of law.
10. Service providers should be aware that forcing a consumer to approach the Court or Legal Forum is not an easy task. Now-a-days, litigation has become very expensive and if any service provider forces a consumer to do so through its malafide and oppressive acts by denying the rightful claim of a consumer, he has to compensate the complainant adequately. Every beneficial legislation, or for that purpose, beneficial contract has to be provided beneficial interpretation. This is the universal rule of interpretation.
A contract of insurance is for the benefit of the insured/consumer and, therefore, every term of the contract has to be interpreted in a manner which is beneficial to the consumer and not the other way around. Insurance Companies indulge in such a practice to ensure that they water down or refuse or defeat the rightful claim of the consumer by twisting the interpretation of terms and clauses in one way or the other with that sole object in mind.
11. In the instant case, the malafide of the appellant-Company are demonstrative. Had the approach of the appellant been bonafide to compensate the respondent as to the loss suffered by him, it would have paid straightaway the amount as per their own perception but here the appellant forced the respondent to file a complaint and wait for years.
12. For such acts of malafide, oppressive and whimsical acts of the service providers/public officers, the Supreme Court has come down very heavily and has called upon the District Forum and Commissions to direct recovery of compensation from the salary of such public officers. Observations of the Supreme Court in Balbir Singhs case (supra) in this regard are also quote-worthy and are as under:-
This Court then went on to hold as follows:
10.
who should pay the amount determined by the Commission for harassment and agony, the statutory authority or should it be realised from those who were responsible for it? Compensation as explained includes both the just equivalent for loss of goods or services and also for sufferance of injustice. For instance in Civil Appeal No.... of 1993 arising out of SLP (Civil) No.659 of 1991 the Commission directed the Bangalore Development Authority to pay Rs.2446.00 to the consumer for the expenses incurred by him in getting the lease-cum-sale agreement registered as it was additional expenditure for alternative site allotted to him. No misfeasance was found. The moment the authority came to know of the mistake committed by it, it took immediate action by allotting alternative site to the respondent. It was compensation for exact loss suffered by the respondent.
It arose in due discharge of duties.
For such acts or omissions the loss suffered has to be made good by the authority itself. But when the sufferance is due to mala fide or oppressive or capricious acts etc. of a public servant, then the nature of liability changes. The Commission under the Act could determine such amount if in its opinion the consumer suffered injury due to what is called misfeasance of the officers by the English Courts. Even in England where award of exemplary or aggravated damages for insult etc. to a person has now been held to be punitive, exception has been carved out if the injury is due to, 'oppressive, arbitrary or unconstitutional action by servants of the Government' (Salmond and Heuston on the Law of Torts).
Misfeasance in public office is explained by Wade in his book on Administrative Law thus:
"Even where there is no ministerial duty as above, and even where no recognised tort such as trespass, nuisance, or negligence is committed, public authorities or officers may be liable in damages for malicious, deliberate or injurious wrong-doing. There is thus a tort which has been called misfeasance in public office, and which includes malicious abuse of power, deliberate maladministration, and perhaps also other unlawful acts causing injury." (p.777).
The jurisdiction and power of the courts to indemnify a citizen for injury suffered due to abuse of power by public authorities is founded as observed by Lord Hailsham in Cassell & Co. Ltd. v. Broome [1972 AC 1027:
(1972) 1 All ER 801] on the principle that, 'an award of exemplary damages can serve a useful purpose in vindicating the strength of law'. An ordinary citizen or a common man is hardly equipped to match the might of the State or its instrumentalities. That is provided by the rule of law. It acts as a check on arbitrary and capricious exercise of power.
In Rookes v. Barnard [1964 AC 1129: (1964) 1 All ER 367, 410] it was observed by Lord Devlin, 'the servants of the government are also the servants of the people and the use of their power must always be subordinate to their duty of service'. A public functionary, if he acts maliciously or oppressively and the exercise of powers results in harassment and agony then it is not an exercise of power but its abuse.
No law provides protection against it.
He who is responsible for it must suffer it. Compensation or damage as explained earlier may arise even when the officer discharges his duty honestly and bona fide. But when it arises due to arbitrary or capricious behaviour then it loses its individual character and assumes social significance. Harassment of a common man by public authorities is socially abhorring and legally impermissible. It may harm him personally but the injury to society is far more grievous. Crime and corruption thrive and prosper in the society due to lack of public resistance. Nothing is more damaging than the feeling of helplessness. An ordinary citizen instead of complaining and fighting succumbs to the pressure of undesirable functioning in offices instead of standing against it. Therefore the award of compensation for harassment by public authorities not only compensates the individual, satisfies him personally but helps in curing social evil.
It may result in improving the work culture and help in changing the outlook.
Wade in his book -
Administrative Law, has observed that it is to the credit of public authorities that there are simply few reported English decisions on this form of malpractice namely, misfeasance in public offices, which includes malicious use of power, deliberate mal-administration and perhaps also other unlawful acts causing injury. One of the reasons for this appears to be development of law which apart, from other factors succeeded in keeping a salutary check on the functioning in the government or semi-government offices by holding the officers personally responsible for their capricious or even ultra vires action resulting in injury or loss to a citizen by awarding damages against them.
Various decisions rendered from time to time have been referred to by Wade on Misfeasance by Public Authorities.
We shall refer to some of them to demonstrate how necessary it is for our society.
In Ashby v. White (1703) 2 Ld. Raym 938 the House of Lords invoked the principle of ubi jus ibi remedium in favour of an elector who was wrongfully prevented from voting and decreed the claim of damages.
The ratio of this decision has been applied and extended by English Courts in various situations.
In Roncarelli v. Duplessis (1959) 16 DLR 2d 689 the Supreme Court of Canada awarded damages against the Prime Minister of Quebec personally for directing the cancellation of a restaurant-owner's liquor licence solely because the licensee provided bail on many occasions for fellow members of the sect of Jehovah's Witnesses, which was then unpopular with the authorities. It was observed that, 'what could be more malicious than to punish this licensee for having done what he had an absolute right to do in a matter utterly irrelevant to the Alcoholic Liquor Act? Malice in the proper sense is simply acting for a reason and purpose knowingly foreign to the administration, to which was added here the element of intentional punishment by what was virtually vocation outlawry.
In Smith v. East Elloe Rural District Council [1956 AC 736: (1956) 1 All ER 855)] The House of Lords held that an action for damages might proceed against the clerk of a local authority personally on the ground that he had procured the compulsory purchase of the plaintiff's property wrongfully and in bad faith.
In Farrington v. Thompson [1959 UR 286] the Supreme Court of Victoria awarded damages for exercising a power the authorities knew they did not possess.
A licensing inspector and a police officer ordered the plaintiff to close his hotel and cease supplying liquor.
He obeyed and filed a suit for the resultant loss. The Court observed:
"Now I take it to be perfectly clear, that if a public officer abuses his office, either by an act of omission or commission, and the consequence of that is an injury to an individual, an action may be maintained against such public officer."
In Wood v. Blair [The Times, July 3, 4, 5, 1957 (Hallet J and Court of Appeal] a dairy farmer's manageress contracted typhoid fever and the local authority served notices forbidding him to sell milk, except under certain conditions. These notices were void, and the farmer was awarded damages on the ground that the notices were invalid and that the plaintiff was entitled to damages for misfeasance. This was done even though the finding was that the officers had acted from the best motives.
11. Today the issue thus is not only of award of compensation but who should bear the brunt. The concept of authority and power exercised by public functionaries has many dimensions. It has undergone tremendous change with passage of time and change in socio-economic outlook. The authority empowered to function under a statute while exercising power discharges public duty. It has to act to subserve general welfare and common good. In discharging this duty honestly and bana fide, loss may accrue to any person. And he may claim compensation which may in circumstances be payable. But where the duty is performed capriciously or the exercise of power results in harassment and agony then the responsibility to pay the loss determined should be whose? In a modern society no authority can arrogate to itself the power to act in a manner which is arbitrary. It is unfortunate that matters which require immediate attention linger on and the man in the street is made to run from one end to other with no result. The culture of window clearance appears to be totally dead.
Even in ordinary matters a common man who has neither the political backing nor the financial strength to match the inaction in public oriented departments gets frustrated and it erodes the credibility in the system. Public administration, no doubt involves a vast amount of administrative discretion which shields the action of administrative authority. But where it is found that exercise of discretion was mala fide and the complainant is entitled to compensation for mental and physical harassment then the officer can no more claim to be under protective cover. When a citizen seeks to recover compensation from a public authority in respect of injuries suffered by him for capricious exercise of power and the National Commission finds it duly proved then it has a statutory obligation to award the same. It was never more necessary than today when even social obligations are regulated by grant of statutory powers. The test of permissive form of grant is over. It is now imperative and implicit in the exercise of power that it should be for the sake of society. When the Court directs payment of damages or compensation against the State the ultimate sufferer is the common man. It is the tax payers' money which is paid for inaction of those who are entrusted under the Act to discharge their duties in accordance with law.
It is, therefore, necessary that the Commission when it is satisfied that a complainant is entitled to compensation for harassment or mental agony or oppression, which finding of course should be recorded carefully on material and convincing circumstances and not lightly, then it should further direct the department concerned to pay the amount to the complainant from the public fund immediately but to recover the same from those who are found responsible for such unpardonable behaviour by dividing it proportionately where there are more than one functionaries."
We are in full agreement with what is observed herein. Thus the law is that the Consumer Protection Act has a wide reach and the Commission has jurisdiction even in cases of service rendered by statutory and public authorities. Such authorities become liable to compensate for misfeasance in public office i.e. an act which is oppressive or capricious or arbitrary or negligent provided loss or injury is suffered by a citizen.
13. Foregoing reasons persuade us to dismiss the Appeal being highly misconceived. Appeal is disposed of in above terms.
14. Impugned Orders shall be complied with within Fifteen days from the date of receipt of a copy of these orders.
15. Copy of Orders, as per statutory requirement, be forwarded to the parties and also to the concerned District Forum and thereafter the file be consigned to record.
16. FDR/Bank Guarantee, if any, be released under proper receipt.
(JUSTICE J.D. KAPOOR) PRESIDENT (RUMNITA MITTAL) MEMBER HK