State Consumer Disputes Redressal Commission
Danthuri Venkatesh, S/O. D. Yellaiah, ... vs M/S. Hdfcergo-General Insurance Co. ... on 25 January, 2018
Cause Title/Judgement-Entry STATE CONSUMER DISPUTES REDRESSAL FORUM Telangana Complaint Case No. CC/240/2013 1. Danthuri Venkatesh, S/o. D. Yellaiah, Age 40 years. Owner of TATA Diesel Vehicle, T/R No. AP-09-VVTR-7965, R/o. H.No.8-27, Adarshanagar Colony, Narketpally Village of Nalgonda Dist, A.P. ...........Complainant(s) Versus 1. M/s. HDFCERGO-GENERAL INSURANCE Co. Ltd., Rep. by its Manager, 4th Floor, 3-6-180/2, Kuchkulla House, Himayathnagar, Hyderabad-500 029. ............Opp.Party(s) BEFORE: HON'BLE MR. JUSTICE B. N. RAO NALLA PRESIDENT HON'BLE MR. Sri. PATIL VITHAL RAO JUDICIAL MEMBER For the Complainant: For the Opp. Party: Dated : 25 Jan 2018 Final Order / Judgement BEFORE THE STATE CONSUMER DISPUTES REDRESSAL COMMISSION OF TELANGANA : AT HYDERABAD CC NO. 240 OF 2013 Between : Danthuri Venkatesh S/o D.Yellaiah Age 40 years, Owner of TATA Diesel Vehicle T/R No.AP-09-VVTR-7965, R/o H.No.8-27, Adarshnagar Colony, Narketpally Nalgonda District, TS Complainant A N D M/s HDFCERO-General Insurance Co.Ltd., Rep. by tis Manager, 4th Floor, 3-6-180/2 Kuchkulla House, Himayathnagar India Bulls Commercial Credit Ltd., (Formerly known as Indiabulls Infrastructure Credit Ltd.,) H.No.3-6-612 & 613, City Estate Building, 1st Floor, Himayatnagar (Op No.2 impleaded as per orders In I.A.No.466/2015 dt.26.08.2016) Opposite parties Counsel for the Complainant M/s Mohd Yousuf Counsel for the Opposite party No.1 M/s N.Srinath Rao Counsel for the Opposite party no.2 M/s Gopi Rajesh & Associates QUORUM : HON'BLE SRI JUSTICE B.N.RAO NALLA, PRESIDENT & SRI PATIL VITHAL RAO, MEMBER
THURSDAY THE TWENTY FIFTH DAY OF JANUARY TWO THOUSAND EIGHTEEN Oral Order : (per Hon'ble Sri Justice B.N.Rao Nalla, Hon'ble President) *** The complaint is filed under section 17 (1)(a)(i) of the Consumer Protection Act, 1986 by the Complainant to direct the opposite parties to pay IDV vehicle cost of Rs.25 lakhs; to pay compensation of Rs.5,00,000/- towards delay in not settling the claim; to pay Rs.5,00,000/- towards EMIs and interest on EMIs; to pay Rs.5,00,000/- towards penalty for harassment and illegal quarries and to pay interest and costs.
2. The case of the complainant in brief is that the complainant is the owner of TATA Diesel Vehicle bearing No.AP-09-VVTR-7965 which was insured with the opposite party no.1 for IDV of Rs.25 lakhs and valid from 18.06.2013 to 17.06.2014. While so on 19.06.2013 the complainant has taken vehicle from Jasper Industries at about 8 p.m. without cabin and body and handed over the vehicle to the driver of the complainant. The vehicle while proceeding from home to Autonagar on the way near Shamshabad suddenly a big sound came from back side of the vehicle and the driver got confused and while slightly turning the vehicle to right side applied sudden brakes. However, the driver could not control the vehicle and accidentally hit the divider and the vehicle fell form 40 feet height bridge in a ditch and the chassis was broken and the entire vehicle was damaged. The complainant immediately reported the accident to the P.S. RGI Airport and also informed to the opposite party. The opposite party deputed a surveyor to the spot who after inspection took photographs and issued a claim form the complainant and also advised to shift the vehicle to the workshop.
3. The complainant submitted the claim form along with all relevant documents to the opposite party for settlement of the claim amount. The workshop people advised the complainant that the entire vehicle was damaged and that there is no scope for its repairs. Though several months have elapsed but the opposite party did not settle the claim instead posing quarries to the complainant. Therefore, the complainant got issued a legal notice calling upon the opposite party for settlement of the claim, though the opposite party received the legal notice but failed to give any reply or settled the claim. The complainant took the vehicle by availing finance from the financer who insisting for payment of EMIs. The opposite party rendered defective service and unfair trade practice by not settling the claim of the complainant. Hence, the complaint with the reliefs as prayed for in paragraph no.1, supra.
4. The opposite party no.1 filed its written version by resisting the case and contended that the complainant is not a consumer as defined u/s 2(d) of C.P. Act and the complaint filed does not come under the purview of consumer dispute as envisaged in Sec.2(e) of the Act and hence the Commission has no jurisdiction to entertain the complaint. The contract of insurance does not fall under the purview of Sale of goods Act as defined under Section 2(i).
5. The opposite party no.1 admitted the issuance of a Goods Carrying Vehicle Package Policy in the name of the complainant covering Tata Multi Axle Truck for the period from 17.01 hrs on 18.06.2013 to 17.06.2014 and the liability of the insurer is subject to the terms, conditions and exceptions of the policy. The complainant an Own Damage Claim has been intimated on 20.06.2013 under the said policy for a loss that occurred on 19.06.2013 and the same was registered vide claim No.C230013029265. An IRDA licensed Independent Surveyor was immediately appointed for inspecting and assessing the loss and the extent of liability to the vehicle. The surveyor upon inspection assessed the net loss to the tune of Rs.11,39,880/-= on repair basis. Since the cost of repairs is no way beyond 75% of the IDV, the contention of the complainant that vehicle was beyond repair and demand for entire IDV is baseless. Since the vehicle is not repaired and bill not submitted there is no deficiency of service. The opposite party had communicated with the complainant as to the requirement of original repair bills and to produce the vehicle for reinsertion along with other claim related documents vide letter dated 17.09.2013. However, despite repeated reminders from the surveyor and the opposite party, the required documents were not submitted by the complainant. The complainant also failed to produce the vehicle for re-inspection and submit the claim related documents to the surveyor. The documents are very much essential without which the claim cannot be processed. Therefore, the opposite party addressed a letter dated 23.09.2013 requesting the complainant to cooperate with the surveyor and produce the vehicle for re-inspection and submit the original repair bills and claim documents required to process the claim for which there was no response from the complainant. Left with no other option, the claim of the complainant was closed for non-submission of required documents by the opposite party and the same was also informed to the complainant vide letter dated 03.10.2013.
6. As per Condition No.8 of the Policy, the complainant has to fulfill the terms and conditions of the policy in so far as they relate to anything to be done or complied with by the insured shall be condition precedent to any liability of the company to make any payment under the policy. For assessing the extent of damage caused to vehicle, the damaged vehicle should be produced before the authorized surveyor appointed by the opposite party to enable him to inspect and assess the loss and on completion of repairs approved by the surveyor, the vehicle should be produced for re-inspection along with the original repair bills and other claim documents to enable the opposite party to process the claim. Apart from the same, the complainant did not even respond t the letters addressed by the opposite party. The opposite party cannot settle the claim unless the required documents are submitted by the complainant. The complainant having neither submitted the required documents nor produced the vehicle for inspection post repairs, cannot insist the opposite party to settle the claim under the policy. The opposite party is a custodian of public funds and cannot settle claims, without perusing the required documents. Hence, the opposite party no.1 prayed for dismissal of the complaint.
7. During the pendency of the complaint the India Bulls Commercial Credit Ltd., filed CCIA No.466 of 2015 to implead itself as a party to the proceedings and the same was allowed by its order dated 26.08.2016 and India Bulls Commercial Credit Ltd. was impleaded as opposite partyno.2 to the complaint.
8. The opposite partyno.2 filed its written version resisting the case and contended that the complainant made an application dated 20.04.2013 for sanction of loan of Rs.21,96,4850/- to purchase the commercial vehicle. The opposite party no.2 after completion of all the formalities on 29.04.2013 sanctioned the loan amount of Rs.21,96,485/- and got hypothecated the said vehicle in favour of the opposite party no.2 and the said amount paid to M/s Jasper Industries Pvt Ltd., and the said vehicle was delivered to the complainant along with proper documents.
9. The complainant also entered into vehicle loan-cum agreement dated 29.04.2013 accepting the terms and conditions of the agreement and signed the documents. The payment schedule to the complainant commenced from 01.06.2013 to 01.04.2018 and the complainant has to pay Rs.52,640/- per month in 59 monthly installments. After receiving the loan amount the complainant failed to repay the loan amount along with interest as per the repayment scheduled agreed by the complainant. By suppressing the fact of accident to his financier the complainant filed a complaint claiming insured amount of Rs.25 lakhs without making the financer as a party to the complaint. Therefore, the opposite party no.2 filed petition to implead as a party in CC and itself added as a party to the proceedings. As per the settled law the financier is owner of the vehicle unless and until the borrower repaid the entire loan amount along with interest. Due to subsequent default committed by the complainant in payment of instalments towards the loan account the dispute was referred to the Sole Arbitrator in terms of clause K of the loan agreement. The notices sent by the Sole Arbitrator hence duly served upon the complainant. It had been informed that in case of non-appearance without any sufficient cause, the Arbitral Tribunal might continue the proceedings exparte. The Sole Arbitrator passed an award, wherein the complainant and his guarantor are jointly and severally liable to pay an mount of Rs.28,20,687/- with interest @ 18% per annum from the date of award till the date of payment or its realization thereof. Hence, the opposite party no.2 prayed for dismissal of the complaint.
10. The complainant filed his evidence affidavit and got Exs.A1 to A13 marked. On behalf of the opposite party no.1, the Senior Legal Manager has filed his affidavit and got Exs.B1 to B5 marked while on behalf of the opposite partyno.2, the Authorized Signatory/Regional Collection Manager has filed his evidence affidavit and got Exs.B6 to B11 marked.
11. Counsel for both parties present and were heard. Written arguments of the complainant and the opposite partyno.2 were already filed. The opposite party no.1 though the matter was conditionally posted to 22.12.2017 not filed the same. After reserving the matter on 22.12.2017 the opposite party no.1 filed its written arguments in the section.
12. The points that arise for consideration are :
Whether the complainant is a consumer?
Whether the complainant is entitled to the IDV cost of Rs.25 lakhs?
iii) Whether the complainant is entitled to any damages? vi) To what relief? 13. POINT NO.1 The opposite party contended that the complainant is not a consumer as defined under Section 2(d) of CP Act and that the complaint does not comes under the purview of consumer dispute as envisaged in Section 2(e) of the Act and hence the Commission has no jurisdiction to entertain the complaint.
14. In The Divisional Manager, L.I.C. vs. Shri Bhavanam Srinivas Reddy, 1991 (2) CPR 144 (NC), Hon'ble National Commission, observed thus :-
"3. The first point of objection raised by the Insurance Company before the State Commission and reiterated before us namely is that no dispute arising out of a contract of insurance can be made subject matter of adjudication under the Consumer Protection Act. This contention cannot be sustained in view of decision of this Commission dated July 28, 1989 in Shri Umedilal Aggarwal v. United India Assurance Company Ltd., F.A. Nos.3 and 4 of 1989 (Reported in I (1991) CPJ-3, 1991 (1) CPR 217 (NC), wherein we have held as follows :-
"We find no merit in the contention put forward by the insurance company that a complaint relating to the failure on the part of the insurer to settle the claim of the insured within a reasonable time and the prayer for the grant of compensation in respect of such delay will not fall within the jurisdiction of the Redressal Forums constituted under the Consumer Protection Act. The provision of facilities in connection with insurance has been specifically included within the scope of the express 'service' by the definition of the said word contained in Section 2(i)(o) of the Act. Our attention was invited by Mr. Malhotra, learned counsel for the Insurance Company to the decision of // 8 // the Queen's Bench in National Transit Insurance Company Ltd. vs. Customs and Central Excise Commissioner, (1975) (1) all England Reports Page 303) The observations contained in the said judgment relating to the scope of the expression 'insurance' occurring the schedule of the enactment referred to therein are of no assistance at all to us in this case because the context in which the expression is used in the English enactment considered in the case is entirely different. Having regard to the philosophy of the Consumer Protection Act and its avowed object of providing cheap and speedy redressal to consumers affected by the failure on the part of persons providing "service" for a consideration, we do not find it possible to hold that the settlement of insurance claims will not be covered by the expression "insurance" occurring in Section 2(1)(d). Whenever there is a default or negligence in regard to such settlement of an insurance claim that will constitute a 'deficiency' in the service on the part of the Insurance company and it will be perfectly open to the concerned aggrieved consumer to approach the Redressal Forums under the Act seeking appropriate relief. We, accordingly over the objection raised by the Insurance Company regarding the jurisdiction of the State Commission to adjudicate upon the complaint.
15. In The Divisional Manager, L.I.C. vs. Uma Devi, 1991 (1) CPR 662 (NC), Hon'ble National Commission, observed thus :-
"8. The very fact that the Insurance Act provides for a machinery for remedy for grievances arising out of repudiation of a claim under section 45 leads to show that the Corporation has to satisfy a Court that the repudiation was justified. Accordingly, it is for the consumer to choose a forum convenient to him to seek remedy for the loss suffered because of deficiency in service. As the provisions of this Act are in addition to and not in derogation of any other law for the time being in force, the State Commission has the jurisdiction to entertain the complaint and to investigate whether the repudiation was justified or not and to grant such relief as deems fit if it is satisfied that there was deficiency in service. We therefore, cannot uphold this contention in view of the decision of this Commission in Revision Petition No.12 of 1990 (New India Assurance Co. Ltd. v. Vipro Electronics Pvt. Ltd., 1991 (1) C.P.R. (NC) 531, where the identical point has been elaborately discussed".
16. In The New India Assurance Co. Ltd. vs. M/s Vipro Electronics Pvt. Ltd., 1991 (1) C.P.R. (N.C.) 531, the Hon'ble National Commission, observed thus :
"We are not impressed with the contention raised by Shri S.K. Paul, learned counsel appearing on behalf of the Petitioner that merely because of Insurer had totally repudiated his liability in respect of the claim, no proceedings could be validly initiated under the Consumer Protection Act by the insurer. This contention squarely falls within the ruling given by this Commission in Ummedilal Agrawal v. United India Assurance Co. Ltd. (O.P.No.3 & 4 of 1989, decided on 28.7.1989". In that decision this Commission has observed that it is not possible to hold that settlement of a disputed insurance claim will not be covered by the expression "service" occurring in Section 2(d) of the Act. It was laid down that whenever there is default or negligence in regard to service that will constitute "deficiency in service" on the part of the insurer and it is perfectly open to the aggrieved party for seeking appropriate relief under the Act.
In the result, the Revision Petition has no merits and it is accordingly dismissed".
17. In M/s. Harsolia Motors vs. M/s. National Insurance Co. Ltd. & Ors. 2005 (1) CPR 1 (NC), Hon'ble National Commission, has observed thus :-
"13. In Halabury's Laws of England Vol. 25, 4th Edition, the origin and common principles of insurance is discussed and in paragraph 3 it has been discussed and in paragraph 3 it has been mentioned that it is based on principle of indemnity. Thereafter, relevant discussion is to the effect that most of contract of insurance belong to general category of contracts of indemnity. In the sense that insurers' liability is limited to the actual loss which is , in fact, proved. The contract is one of indemnity and, therefore, insured can recover the actual amount of loss and no more.
18. In this view of the matter, taking of the insurance policy is for protection of the interest of the assured in the articles or goods and not for making any profit or trading for carrying on commercial purpose.
19. We would refer to few relevant judgments :
20. In Regional Provident Fund Commissioner vs. Shiv Kumar Joshi, (2000) 1 SCC 98, the Court elaborately considered the provisions of Sections 2(1)(d) and 2(1)(o) as well as earlier decisions and held that :-
"The combined reading of the definitions of 'consumer' and 'service' under the Act and looking at the aims and object for which the Act was enacted, it is imperative that the words "consumer" and "service" as defined under the Act should be construed to comprehend consumer and services of commercial and trade-oriented nature only. Thus any person who is found to have hired services for consideration shall 'be deemed to be a consumer notwithstanding that the services were in // 11 // connection with any goods or their user. Such services may be for any connected commercial activity and may also relate to the services as indicated in Section 2(1)(o) of the Act."
The aforesaid ratio makes it abundantly clear that the services may be for any connected commercial activity, yet it would be within the purview of the Act."
21. On the basis of above cited judgments, it is clear that the dispute between the parties is a consumer dispute and the complainant comes within the purview of "consumer" as defined under Section 2(1)(d) of the Consumer Protection Act, 1986. This point is answered in favour of the complainant and against the opposite parties.
22. POINTS NO.2 TO 4 On behalf of the opposite party it is contended that on receipt of the information regarding the accident of complainant's vehicle, M/s Intech Insurance Surveyors Pvt Ltd., were appointed for investigation who submitted investigation report dated 10.10.2013, Ex.B2. The surveyor had asked the complainant to provide the necessary documents and to get the vehicle repaired so that the final assessment of the loss could be carried out but the complainant failed to furnish the documents/bills with respect to the repair of his vehicle. As the vehicle was not being repaired by the complainant, the surveyor had written reminder no.1 Ex.B2 dated 17.09.2013 to the complainant whereby he was informed that despite several telephonic reminders by the panel surveyor the complainant has failed to produce the vhiele for re-inspection and to submit claim required documents. . Reminder no.2 dated 23.09.2013, Ex.B4 was also sent to the complainant. Thereafter, vide letter dated 03.10.2013 the complainant was informed by the opposite party that the claim was closed as "No Claim" due to not producing the vehicle for re-inspection and not producing the claim required documents. The complainant furnished the claim form upon which the surveyor M/s Intech Insurance Surveyors Pvt Ltd had checked the vehicle and gave his detailed assessment report B2, vide which the loss of the vehicle was assessed at Rs.11,,39,880/- - as per the terms and conditions of the Insurance Policy, after deduction for depreciation, policy excess and salvage. But the complainant was adamant to get the vehicle declared as total loss and did not get the vehicle repaired.
23. It is an undisputed fact that the vehicle belonging to the complainant was insured for a sum of Rs. 25,00,000/- commencing from 18.06.2013 to 17.06.2014. During existence of the policy it met with an accident on 19.06.2013 when the vehicle was proceeding to Autonagar. When the fact was intimated the opposite party insurance company appointed a surveyor who assessed the net loss to the tune of Rs.11,39,880/- on repair basis. When the insurance company was not settling the claim he got issued legal notice dated 18.10.2013 Ex.A11 to settle the claim by paying an amount of Rs.25,00,000/- towards IDV cost of the vehicle. It is to be noted here that the insurance company was insisting to get the vehicle repaired, and submit the bills, the complainant right from the beginning asserting that the estimate made by repairer M/s. Aditya Auto Engineers & Technicians Authorized service station marked as Ex.A6 was beyond 75% of the IDV and therefore to treat it as total loss. Despite the said submission the insurance company did not respond. All through the insurance company was insisting that we are always at his service. When the complainant was maintaining that the repair charges would exceed 75% of the cost of the IDV, the insurance company by issuing Ex. B3 dated 17.09.2013 informed that the complainant has not produced the vehicle for re-inspection and not submitted the claim required documents to the panel surveyor and also the original repair bills. If the complainant failed to submit the same the claim will be closed as "No claim".
24. Ex.B2 is the Final Survey Report dated 10.10.2013 and the relevant portion is as under:
Extent of Damages FES and chassis long member were bent and misaligned and it needs replacement.
Gear box casing were broken and it needs replacement of casing and internal parts to be verified after dismantling the casings.
Front beam axle and auxiliary axles were damaged and needs replacement Propeller shift is damaged and need replacement.
Engine block was given crack and it needs replacement.
Front and rear leaf springs and struts were damaged and needs replacement Driver seat was bent and misaligned and needs replacement Steering column and steering gear were damaged and needs replacement DETAILS OF ASSESSMENT The insured has submitted the estimation for Rs.22,59,267/- from the repairer M/s Tawakkal Body Builder Works, Hyderabad. The details of the loss assessment sheet enclosed with the report as Annexure-1.
LOSS ASSESSMENT ON REPAIR BASIS Description Estimated Assessed Cost of spare parts Rs.22,33,267.00 Rs.11,65,380.00 Labour charges Rs. 26,000.00 Rs. 26,000.00 Total loss assessed Rs.22,59,267.00 Rs.11,91,380.00 Less salvage value Rs. 50,000.00 Rs. 1,500.00 Rs.11,39,880.00 REMARKS Physically verified the engine and chassis numbers and found in order Verified documents with the originals and found in order Given repair approval to the insured and workshop and the after repeated calls the insured not responded and the claim liability is left to the insurer.
25. The vehicle met with an accident on the date of purchase itself i.e., 19.06.2013 . M/s Aditya Auto Engineers & Technicians gave the estimate who opined that the parts mentioned in the list needs to be replaced. In this case, it seems, concerned Mechanic appears to have taken the decision, to replace the Chassis frame instead of repair, since it would cause further problem, in which, we are unable to find any defect or anything wrong. Only in order to evade the responsibility to reduce the cost of the compensation, in our considered opinion, the Insurance Company-a public body, is taking frivolous defence, which is to be rejected. When a vehicle is completely damaged, working out the cost of the damaged part alone, will not serve the purpose, since the connected parts also have to be replaced, to have the vehicle worthy of transport. Therefore, only fixing the cost of the damaged parts alone, damage cannot be worked out and the entire cost involved in repairing the vehicle, to make it road worthy, also should be taken into account, considering realistic view. Therefore, the value given by the Surveyor of the opposite party, cannot be taken as the value reflecting the actual damage occurred to the vehicle. As proved by the documents, namely, Estimate given by M/s Aditya Auto Engineers & Technicians, Ex.A6, the Survey report of Mr. V.Rajasekhar Reddy, Licensed Surveyor, Ex.A8 and the estimation for Rs.22,59,567/- given by M/s Tawakkal body Builder Works Hyderabad shows the cost of repairing of vehicle more than Rs.20 lakhs which should be paid by the complainant, considering the new brand of the vehicle, which met with an accident on the date of purchase/delivery itself. We do not find any reason to eschew the estimations of M/s Aditya Auto Engineers & Technicians, the report of Surveyor of V.Rajasekhar Reddy and also that of M/s Tawakkal body Builder Works, Hyderabad in support of the claim. The opposite parties informed the complainant vide it letters dated 17.09.2013 and 23.09.2013 stating that the complainant has not produced the vehicle for re-inspection and not submitted the claim required documents. After the above said two letters, the opposite party again addressed letter dated 03.10.203 informing the complainant that " despite of several telephonic reminders by our panel surveyor, till date there has been no response from your end. You have not produced the vehicle for Re-inspection & not submitted the claim required documents to our panel surveyor M/s Intech Insurance Surveyor Pvt. Ltd., Rep. by Mr.P.Madhu" " Hence we presume that you are no longer interested to claim from us & close same as " No Claim" in our records". But strangely a final report was given by M/s Intech Insurance Surveyors Pvt Ltd., dated 10.10.2013 estimating the loss at Rs.11,39,880/- and also gave its remarks that they physically verified the engine and chassis numbers and found in order, verified documents with the originals and found in order, given repair approval to the insured and workshop.
26. According to the opposite parties the total loss of the vehicle can be declared only when the repair expenses of the vehicle exceeds 75% of the insured value of the vehicle, as has been mentioned in GR 8 of the Indian Motor Tariff which governs the terms and conditions of the Insurance Policy.
GR.8. Insured's Declared Value (IDV) The Insured's Declared Value (IDV) of the vehicle will be deemed to be the SUM INSURED for the purpose of this tariff and it will be fixed at the commencement of each policy period for each insured vehicle.
The IDV of the vehicle is to be fixed on the basis of manufacturers listed selling price of the brand and model as the vehicle proposed for insurance at the commencement of insurance/renewal and adjusted for depreciation (as per schedule specified below). The IDV of the side car(s) and/or accessories, if any, fitted to the vehicle but not included in the manufacturers listed selling price of the vehicle is also likewise to be fixed.
The schedule of age-wise depreciation as shown below is applicable for the purpose of Total Loss/Constructive Total Loss (TL/CTL) claims only. A vehicle will be considered to be a CTL, where the aggregate cost of retrieval and/or repair of the vehicle subject to terms and conditions of the policy exceeds 75% of the IDV.
The depreciation for replacement of parts in partial loss claims will be as per a separate schedule specified under GR.9.
SCHEDULE OF DEPRECIATION FOR ARRIVING AT IDV AGE OF THE VEHICLE % OF DEPRECIATION FOR FIXING IDV Not exceeding 6 months 5% Exceeding 6 months but not exceeding 1 year 15% Exceeding 1 year but not exceeding 2 years 20% Exceeding 2 years but not exceeding 3 years 30% Exceeding 3 years but not exceeding 4 years 40% Exceeding 4 years but not exceeding 5 years 50% NOTE: IDV of vehicles beyond 5 years of age and of obsolete models of the vehicles (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.
For the purpose of TL/CTL claim settlement, this IDV will not change during the currency of the policy period in question. It is clearly understood that the liability of the insurer shall in no case exceed the IDV as specified in the policy schedule less the value of the wreck, in as is where is condition.
27. Admittedly, in the instant case the insured value of complainants vehicle was more than Rs.20 lakhs and as per the report of the surveyor, the repair value was assessed at Rs.11,39,880 /-. Thus, the repair value of the vehicle as per the two estimates and survey report of the complainant exceeds 75% of the insured value which comes to Rs.15,00,000/-. In other words, 75% of the insured value of vehicle is more than the repair value and therefore the claim of the complainant was to be settled by the Insurance Company on the basis of IDV value of the vehicle and the Insurance Company has to declare it a case of total damage of vehicle. The photographs filed by the complainant has also show that the vehicle was extensively damaged and it is not at all repairable.
28. 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.
29. 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/- along with 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.
30. In the light of above evidence, we are of the opinion that the complainant is entitled to the amount covered under the policy. The vehicle was insured for Rs.25,00,000/- on 18.06.2013 and the accident happened immediately on the next day 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 5% of the insured amount. Hence, the opposite party no.1 is liable to pay Rs.25,00,000/- minus 1,25,000/- equal to Rs.23,75,000/- with interest @ 6% per annum from the date of complaint till the date of payment. The insurance company can as well take the vehicle in order to recover its salvage value, if any. The complainant cannot be made liable for payment of demurrage charges or the state in which vehicle remained with the repairer. With regard to the opposite party no.2, the opposite party no.2 has already got the arbitration award and it can proceed as per the arbitration proceeds against the complainant and this Commission is nothing to do with the recovery of the loan amount from the complainant. Accordingly, the points no.2 to 4 are answered in favour of the complainant and against the opposite parties.
In the result the complaint is allowed in part directing the opposite party no.1 to pay Rs.23,75,000/- ( Rs.25,00,000/- minus Rs.1,25,000/-) with interest @ 6% per annum from the date of complaint till the date of payment together with costs of Rs.5,000/-. The complaint against the opposite party no.2 is dismissed without costs. Time for compliance four weeks.
PRESIDENT MEMBER 25.01.2018 APPENDIX OF EVIDENCE WITNESSES EXAMINED NIL EXHIBITS MARKED For complainant Ex.A1 Panchanama dated 20.06.2013 Ex.A2 Temporary Certificate of Registration Ex.A3 Initial Certificate of Road Worthiness Ex.A4 Goods Carrying Vehicle Package Policy dated 18.06.2013 Ex.A5 Vehicle delivery Acknowledgement note Ex.A6 Estimation of Aditya Auto Engineers & Technicians dated 12.08.2013 Ex.A7 Photographs Ex.A8 Motor Private Confidential Loss Final Survey Report dt 13.08.2013 Ex.A9 Survey Bill dated 13.08.2013 Ex.A10 Legal notice/vehicle inspection notice dated 01.10.2013 Ex.A11 Legal notice dated 18.10.2013 of complainant Ex.A12 Postal receipt and acknowledgment Ex.A13 Vehicle Damage Photocd along with Driving License For opposite party no.1 Ex.B1 Policy copy along with terms and conditions Ex.B2 Survey report of M/s Intech Insurance Surveyors Pvt Ltd., Dated 10.10.2013 Ex.B3 Copy of reminder letter dated 17.09.2013 Ex.B4 Copy of reminder letter dated 23.09.2013 Ex.B5 Copy of Final Letter dated 3.10.2013 For opposite party no.2 Ex.B6 Copy of application for commercial vehicle loan Ex.B7 Copy of vehicle loan-cum-hypothecation agreement dated 29.04.13 Ex.B8 Copy of passbook Ex.B9 Copy of letter of Op no.2 dated 24.08.2015 Ex.B10 Copy of Panchanama dated 20.06.2013 Ex.B11 Copy of Tax Invoice dated 12.06.2013 Ex.B12 Copy of Tax Receipt [HON'BLE MR. JUSTICE B. N. RAO NALLA] PRESIDENT [HON'BLE MR. Sri. PATIL VITHAL RAO] JUDICIAL MEMBER