State Consumer Disputes Redressal Commission
The Oriental Insurance Co. Ltd. vs Sh. Rajendra Joshi on 11 June, 2007
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND DEHRA DUN FIRST APPEAL NO. 274 / 2005 The Oriental Insurance Co. Ltd. ......Appellant Versus Sh. Rajendra Joshi .....Respondent Sh. Manoj Kohli, Learned Counsel for the Appellant Sh. Rajiv Kumar, Learned Counsel for the Respondent Coram: Hon'ble Justice Irshad Hussain, President Surendra Kumar, Member Dated: 11.06.2007 ORDER
(Per:
Justice Irshad Hussain, President):
This appeal is directed against the order dated 16.11.2005 passed by the District Consumer Forum, Nainital, partly allowing consumer complaint No. 34 / 2004 and directing the insurer - appellant to pay Rs. 3,00,000/- with interest @9% p.a. as compensation for total loss of the accidental vehicle and Rs. 1,500/- as cost.
2. It is not in dispute that complainant's insured vehicle met with an accident on 12.10.2003. Insured vehicle fell down into road side valley approximately 300-350 feet below from the road head after breaking the roadside parapet and finally overturned on its right side and got damaged.
3. Insurer's surveyor vide his final survey report dated 20.11.2003 (Paper Nos. 17 to 25) assessed net loss of Rs. 1,55,093/- on repair basis as against the estimate of Rs. 4,45,219/- submitted by the authorised dealer. The District Forum on an appreciation of the material on record observed that the loss assessed by the surveyor is not at all reasonable and justified and that in view of the extensive damage caused to the vehicle in the accident, settlement of the loss is required to be made on total loss basis. The vehicle was insured for sum of Rs. 3,00,000/- and the District Forum thus found it fit to award the compensation at the insured value of the vehicle with interest in case the compensation is not paid within the stipulated period of one month.
4. We have heard the learned counsel for the parties and considered the material on record. Learned counsel for the appellant submitted that the report of surveyor in insurance claim is an important document and should not be shunned without sufficient reasons as has been done in this case by the District Forum and that the claim in the face of the bodily damage only to the vehicle was required to be settled on repair basis as suggested by the surveyor. In support of the argument, learned counsel placed reliance on the decision of the Hon'ble National Commission in the case of United India Insurance Co. Ltd. Vs. Jadhav Kirana Stores; 2005 (1) CPR 96 (NC). Having considered the photographs of the accidental vehicle (Paper Nos. 89 to 92) filed by the appellant and photographs (Paper Nos. 81, 82 & 87) filed by the complainant in the light of the estimate submitted by the authorised dealer and the surveyor's report, we are of the firm view that the submission of the learned counsel cannot safely be sustained. The vehicle fell down into a very deep road side valley and got badly damaged as is evident from the photographs brought on record. Apart from the damage sustained bodily, chassis frame of the vehicle got bended and damaged to such an extent as it required replacement by a new chassis frame even in the opinion of insurer's surveyor, who mentioned this item at Sl. No. 32 of the metallic parts in his report. There can be no doubt that this damage must have been the result of fall of the vehicle into a very deep ravine from the road and in a situation like this, we find it difficult to agree with the surveyor's observation that vital components of the engine of the vehicle were not damaged. Therefore, the authorised dealer of the vehicle in its estimate (Paper Nos. 52 to 56) rightly referred to the damage to the vital engine parts and requirement of their replacement. Considering the estimated cost of repairs exceeding Rs. 4,00,000/- and keeping in view the extensive damage to the vehicle, the view taken by the District Forum that the loss required to be assessed on total loss basis clearly appear to be based on proper and reasonable appreciation of the material on record and further that the surveyor's report was ignored for sufficient reasons. In other words, the complainant was entitled to be indemnified for the loss on total loss basis and not on repair basis as suggested by the insurer's surveyor.
5. Accidental vehicle was insured for sum of Rs. 3,00,000/- and the period of insurance was 24.02.2003 to 23.02.2004. Accident took place on 12.10.2003, that is, after more than six months of the commencement of the period of insurance and as such the value of the vehicle on the date of the accident was required to be fixed on deduction of the depreciation at prescribed percentage. Under the provisions of the Indian Motor Tariff, 15% depreciation in this case was required to be made in order to fix the value of the accidental vehicle on the date of the accident and in other words to assess the loss for the purposes of indemnification under the policy of insurance. By applying 15% depreciation, the loss assessed comes to Rs. 2,55,000/- (3,00,000 - 45,000) and not more than that sum could have been awarded as compensation to the complainant. In view of the loss assessed on total loss basis, the value of the salvage can reasonably be fixed at Rs. 85,000/- and in case the salvage is not returned by the complainant, sum of Rs. 85,000/- may be deducted from the amount of compensation of Rs. 2,55,000/-. There was nothing wrong in awarding the interest as the insurer made deficiency in service in not settling the claim within reasonable time of three months.
6. In view of above, the appeal partly succeed and the impugned order need to be modified to the above extent.
7. Appeal is partly allowed. Order dated 16.11.2005 of the District Forum is modified to the extent that the complainant is held entitled to compensation of Rs. 2,55,000/- instead of Rs. 3,00,000/- together with interest @9% p.a. w.e.f. 24.02.2004 till the date of payment and Rs. 1,500/- as cost awarded by the District Forum. The complainant shall return the salvage to the appellant and in default sum of Rs. 85,000/- shall be deducted from the amount of compensation awarded. The registration certificate and documents of the vehicle shall be surrendered by the complainant to the appellant. Cost of the appeal made easy.
(SURENDRA KUMAR) (JUSTICE IRSHAD HUSSAIN)