State Consumer Disputes Redressal Commission
Upper India Carriers vs New India Assurance Co. Ltd on 11 February, 2014
STATE
CONSUMER DISPUTES REDRESSAL COMMISSION,
U.T., CHANDIGARH
Consumer
Complaint No.
:
79 of 2013
Date of Institution
:
07.11.2013
Date of Decision
:
11.02.2014
Upper India Carriers,
SCO 136, Sector 24D, Chandigarh through its Proprietor, Sh. Atul Loomba.
.Complainant.
Versus
M/s New India Assurance Co. Ltd., CHANDIGARH
REGIONAL OFFICE: SCO No.36-37, Sector 17-A, Chandigarh 160 017 through
its Chief Regional Manager.
M/s New India Assurance Co. Ltd., Divisional
Office, SCO 804, NAC, Manimajra, Chandigarh through Sr. Divisional
Manager.
Mr. Aloke Kr. Chandra, Surveyor &
Loss Assessor through M/s New India Assurance Co. Ltd., SCO 804, NAC,
Manimajra, Chandigarh.
.Opposite Parties.
Complaint
under Section 17 of the Consumer Protection Act, 1986.
BEFORE: JUSTICE SHAM SUNDER (RETD.), PRESIDENT.
MR. DEV RAJ, MEMBER.
MRS. PADMA PANDEY, MEMBER Argued by: Sh.
Pankaj Chandgothia, Advocate for the complainant.
Sh. J. P. Nahar, Advocate for the Opposite Parties.
PER DEV RAJ, MEMBER The facts, in brief, are that the complainant got his trailer bearing Registration No.HR-55-G-6629 insured from Opposite Party No.2, for the Insured Declared Value of Rs.16,50,000/- for the period from 05.02.2011 to 04.02.2012. It was stated that as per the Insurance Certificate (Annexure C-1), the insurance covered third party liability as well as legal liability to paid driver/conductor/cleaner also. The complainant has annexed copy of the Certificate of Registration and National Permit as Annexures C-2 and C-3. It was further stated that, unfortunately, the said vehicle met with a serious accident on 19.12.2011, when all of a sudden the bridge collapsed and the entire vehicle plunged into the river bed from the height of 100 feet resulting in a total loss. It was further stated that at the time of the accident, two numbers of Three-Axle Line Hydraulic trailers attached to the Volvo Tractor, loaded with Transformer were crossing Rangchang Khola Bridge in East Sikkim, which collapsed. It was further stated that intimation regarding the accident was given to Opposite Party No.1 vide letter dated 21.12.2011 (Annexure C-5) and detailed letter dated 9.1.2012 was also submitted to Opposite Party No.2 (Annexure C-6). It was further stated that FIR No.51 dated 19.12.2011 was got registered at Police Station Singtam, DT East Sikkim, Sikkim. It was further stated that spot survey was conducted and report dated 25.1.2012 (Annexure C-7) was submitted by the Surveyor. It was further stated that Opposite Parties No.1 and 2 delayed the appointment of final Surveyor, which inordinately delayed the assessment of loss. It was further stated that the complainant wrote a letter dated 15.3.2012 (Annexure C-8) to the Opposite Parties, requesting them once again, to appoint the competent Surveyor to enable the final disposal and settlement of the claim case. It was further stated that Opposite Parties No.1 and 2 appointed Opposite Party No.3, as the final Surveyor in the month of May 2012, who demanded various irrelevant documents and information and delayed the submission of final report on one pretext or the other. It was further stated that Opposite Party No.3 finally submitted his report on 26.7.2012 (Annexure C-12), which showed that it was a futile exercise, which only wasted further precious time. It was further stated that as per the Surveyor, the cost of recovery per trailer was Rs.2,20,000/- which, therefore, was not obviously recovered. It was further stated that as per the law of Insurance, if the estimated cost is more than 75% of the IDV, then the case has to be settled on total loss basis. It was further stated that, ultimately, the Surveyor assessed loss on total loss basis, but only recommended the same to the extent of Rs.12,91,750/- and illegally deducted Rs.3,50,000/- as salvage value and Rs.8,250/- as excess clause. It was further stated that the Opposite Parties could not impose the salvage on the complainant and, therefore, he is entitled to the full IDV of Rs.16,50,000/- on the basis of total loss of the vehicle, apart from the claim under the head of legal liability to paid driver etc. and third party liability. It was further stated that Opposite Parties No.1 and 2 are delaying the settlement of the claim. It was further stated that the complainant wrote a letter dated 5.9.2013 (Annexure C-14), followed by an email dated 8.10.2013 (Annexure C-15), but to no avail. It was further stated that even after two years of the accident, and fifteen months of the survey report, the claim has not been settled by Opposite Parties No.1 and 2, which amounted not only to deficiency, in rendering service, but also indulgence into unfair trade practice. When the grievance of the complainant, was not redressed, left with no alternative, a complaint under Section 17 of the Consumer Protection Act, 1986 (hereinafter to be called as the Act only), was filed, directing the Opposite Parties, to pay Rs.16,50,000/-being the Insured Declared Value alongwith interest @18% per annum w.e.f. 19.12.2011; Rs.2,50,000/- towards legal liability to driver and other employees; Rs.5,00,000/- towards reimbursement of other related expenses; Rs.5,00,000/- as compensation for mental agony and physical harassment; Rs.3,00,000/- as compensation for unfair trade practice, Rs.50,000/- as punitive damages and Rs.50,000/- as legal costs.
2. Opposite Parties, in their written version, took up certain preliminary objections, that the Commission has no pecuniary jurisdiction over the matter as the Insured Declared Value of the vehicle, in question, is below Rs.20 Lacs and the complaint was premature as they (Opposite Parties) have not yet taken a decision on the claim and the same was in the process of settlement. On merits, it was admitted that the Trailer bearing Regd. No.HR-55-G-6629 was insured with Opposite Party No.2 vide Policy No.35300031100100011181, for the period from 5.2.2011 to 4.2.2012 for the IDV of Rs.16,50,000/-. It was admitted that the Insurance Policy covered the legal liability towards the employees connected with the operation of the vehicle but no claim was lodged in this regard. It was admitted that the vehicle, in question, met with an accident on 19.12.2011 while it was being pulled by the Prime Mover and intimation was given on 21.12.2011. It was further stated that the final Surveyor could be deputed on submission of the estimate of the repairs and receipt of the spot survey report. It was further stated that the Surveyor was deputed on 03.05.2012, who visited the spot on 16.05.2012, where the vehicle was lying in the damaged condition. It was further stated that the extent of damage could be intimated by the Surveyor only and the officials of the Opposite Parties had nothing to say about it. It was denied that the final survey by the Surveyor was a futile exercise and the case could have been treated as a total loss. It was further stated that for payment of any claim of Rs.20,000/-, it is mandatory under Section 64UM (2) of the Insurance Act, 1938 to depute a licensed Surveyor approved by the IRDA. It was admitted that the Surveyor submitted his report dated 26.7.2012 (Annexure R-2). It was denied that the survey conducted was not proper. It was stated that the Surveyor assessed the loss treating it as a total loss but the IDV of Rs.16,50,000/- was reduced by Rs.8,250/- as Excess Clause as per the Policy and Rs.3,50,000/- were deducted as the salvage value on as is where is basis. It was further stated that, as such, the Surveyor recommended payment of Rs.12,91,750/- for payment on net of salvage basis. It was denied that demand of documents and information by the Surveyor was unnecessary. It was further stated that the amount towards salvage of the damaged vehicle, is required to be reduced from the IDV and complainant was not entitled to full IDV. It was also submitted that payment of loss was subject to terms and conditions of Policy. It was further stated that in the absence of the settlement of claim for the Prime Mover, the claim for the trailer could not be settled. It was further stated that the complainant has not attached any document in support of his contention that the entire loan amount had been paid to the financier. It was further stated that neither there was any deficiency, in rendering service, on the part of Opposite Parties, nor did they indulge into unfair trade practice. The remaining averments, were denied, being wrong.
3. The complainant, in support of its case, submitted the affidavit of Sh. Atul Loomba, its Proprietor, by way of evidence, alongwith which, a number of documents were attached.
4. The Opposite Parties, in support of their case, submitted the affidavit of Sh. Raj Kapoor, Sr. Divisional Manager and Power of attorney holder, by way of evidence, alongwith which, a number of documents were attached.
5. The complainant filed replication, wherein the proprietor thereof reiterated all the averments, contained in the complaint, and repudiated the same, contained in the written version of the Opposite Parties.
6. We have heard the Counsel for the parties, and, have gone through the evidence, record of the case and written arguments submitted by the parties, carefully.
7. The Counsel for the complainant, submitted that the trailer, in question, was insured by Opposite Party No.2, vide Policy Schedule-cum-Certificate of Insurance (Annexure C-1) for the IDV of Rs.16,50,000/-, valid for the period from 05.02.2011 to 04.02.2012. It was further submitted that the said trailer was having proper registration and national permit, Annexures C-2 and C-3. It was further submitted that on 19.12.2011, the bridge collapsed and, consequently, the trailer fell in the rivulet. It was further submitted that FIR was registered by the State as bridge collapsed due to the poor construction of the bridge and not due to the fault or negligence of the driver. It was further submitted that intimation was immediately given to the Opposite Parties vide letter dated 21.12.2011 (Annexure C-5). It was further submitted that spot survey report dated 25.1.2012 was submitted and claim was still pending as the same was neither rejected nor allowed nor any deficiency attributable to the complainant was pointed out even in the final survey report dated 26.07.2012 (Annexure C-12). It was further submitted that it was a case of total loss and the salvage was not of any worth as the vehicle was completely wrecked. It was further submitted that detailed survey report indicated that the Three-Axle Line Hydraulic trailers attached to the Volvo Tractor were not overloaded. It was further stated that the Surveyor illegally and arbitrarily recommended claim of Rs.12,91,750/- and wrongly deducted Rs.3,50,000/- as salvage value. It was further submitted that the complainant was entitled to full claim of Rs.16,50,000/-, being the IDV of the trailer, in question. It was also submitted that M/s. Sundaram Finance has issued No Dues Certificate (Annexure C-16).
8. The Counsel for the Opposite Parties, admitted that it was a case of total loss. He submitted that as per the Insurance Regulatory and Development Authority (Protection of Policyholders Interests) Regulations, 2002, in special circumstances of the case, either due to its special and complicated nature, the Surveyor, could take six months for submission of his report, from the date of his appointment. It was further submitted that the Surveyor rightly assessed the loss to the tune of Rs.12,91,750/- after deducting Rs.8,250/- under Policy excess clause and Rs.3,50,000/- towards salvage. It was further submitted that in the absence of the settlement of claim for the Prime Mover, the claim for the trailer could not be settled.
9. The first question, which arises for consideration, is, as to whether, the complaint falls within the pecuniary jurisdiction of this Commission. The Opposite Parties have submitted that the Insured Declared Value of the trailer was Rs.16,50,000/-, which is less than Rs.20 Lacs, the complaint falls within the pecuniary jurisdiction of the District Forum. No doubt the I.D.V of the trailer, in question, is Rs.16,50,000/- but the complainant has also claimed compensation of Rs.5,00,000/- for harassment and mental agony and Rs.3,00,000/- as compensation for unfair trade practice besides cost of litigation etc., the sum total of all these reliefs, put together, exceeds Rs.20 Lacs and, therefore, the complaint is well within the pecuniary jurisdiction of this Commission.
10. The second question, which falls for consideration, is, as to whether the complaint is premature on account of the fact, that the Opposite Parties, have not taken any decision regarding the claim. As per the Insurance Regulatory and Development Authority (Protection of Policyholders Interests) Regulations, 2002), in special circumstance of the case, the Surveyor, could take six months for submission of his report, from the date of his appointment. In the instant case, the accident took place on 19.12.2011, and the Surveyor submitted his report on 26.07.2012 (Annexure C-12). Despite submission of report by the Surveyor, the Opposite Parties have not taken decision for 1 year, which by no stretch of imagination, can be said to be justified and the complaint, on this ground, cannot be said to be premature.
11. The factum of insurance of the trailer bearing Registration No.HR-55-G-6629 by Opposite Parties No.1 and 2, for the period from 5.2.2011 to 4.2.2012, accident on 19.12.2011 due to the collapse of bridge on account of poor construction; lodging of the FIR; and intimation by the complainant to the Opposite Parties on 21.12.2011 is admitted by the parties.
12. No doubt, the Surveyor was appointed, who submitted his motor spot survey report on 25.1.2012 (Annexure C-7), and, the final survey report was submitted on 26.7.2012 (Annexure C-12). The details of assessment made by the Surveyor, in his final survey report (Annexure R-2), on repair basis, total loss basis and net loss basis, are extracted hereunder:-
REPAIR BASIS ASSESSMENT Labour charges as assessed Rs.56,180.00 Cost of mental parts inc. VAT after deducting dep @35% Rs.13,95,004.00 Rs.14,51,184.00 Less: Salvage value Rs.2,25,000.00 Rs.12,51,184.00 Less: Policy excess 8,250.00 12,42,934.00 Hence, Total cost of repairing after deducting depreciation on parts is Rs.14,51,184/- which exceeds 75% of IDV i.e. Rs.12,37,500/-.
Therefore, liability of Insurer on repair basis assessment has been worked out for Rs.12,42,934/-.
NOTE: The above assessment of loss has been drawn based on physical inspection of trailer at spot of accident as is where is condition without dismantling the affected portions. Considering the nature and magnitude of impact it is apprehended that some unexposed parts of the Trailer might be affected but the exact quantum of damages cannot be ascertained until and unless the Trailer is to be dismantled. Therefore, in my opinion, the above assessment of loss will be enhanced after dismantling the Trailer.
TOTAL LOSS BASIS Insured Declared Value of the captioned vehicle Rs.16,50,000.00 Less Policy excess Rs.8,250.00 Rs.16,41,750.00 Expected salvage value of the Trailer as is where is condition after recovery from spot to road surface Rs.3,50,000.00 Therefore, the liability of the Insurer on Total Loss Basis is Rs.16,41,750.00 Rs.3,50,000.000 = Rs.12,91,750.00 plus Rs.50,000.00 under heading of salvage disposal and advertisement cost.
NET LOSS BASIS Insured Declared Value of the captioned vehicle Rs.16,50,000.00 Less Policy excess Rs.8,250.00 Rs.16,41,750.00 Less: Salvage value of captioned trailer as is where is condition Rs.3,50,000.00 Rs.12,91,750.00 While giving the above assessment, the Surveyor has given the following observations/recommendations:-
Therefore, the liability of the Insurer on Net Loss basis have been worked out for Rs.12,91,750.00 and salvage is to be retained by the Insured and policy stands cancel with effect from the date of accident. HENCE, the undersigned recommends the settlement of claim on NET LOSS Basis for Rs.12,91,750/- and Salvage is to be retained by the Insured and policy stands cancel with effect from the date of accident.
The final Surveyor report dated 26.7.2012 (Annexure C-12) is very specific and no fault is attributable, either to the driver or the complainant. The cause of accident was the faulty construction of bridge and the vehicle fell in the river due to collapse of the same (bridge).The Surveyor, after assessing the liability of the Opposite Parties, on different counts, viz. repair basis, total loss basis and net loss basis, finally recommended payment of Rs.12,91,750/- on net loss basis and the salvage was to be retained by the complainant. The Survey report is duly supported by a duly sworn affidavit of the Surveyor.
13. Opposite Parties No.1 and 2 have failed to lead any cogent evidence to rebut the authenticity of the report of the Surveyor and his recommendation for settlement of claim on net loss basis for Rs.12,91,750/- and salvage to be retained by the Insured. In fact, Opposite Parties No.1 and 2 in their written statement admitted that the Surveyor Report was proper
14. In Sikka Papers Limited Vs. National Insurance Company Limited, (2009) 7 Supreme Court Cases 777, it was held that, no doubt, the report of the Surveyor is not the last word, yet there must be legitimate reason, for departing from the same. In New India Assurance Company Ltd. Vs. Rabindra Narayan, I (2010) CPJ 80 (NC), it was held that the Surveyors report, being an important piece of evidence, was required to be given weight and relied upon, unless proved unreliable. In Dabirudin Cold Storage Vs. New India Assurance Company Ltd. & Ors., I (2010) CPJ 141 (NC), it was held that the Surveyors report, being an important document, cannot be easily brushed aside. Since the Opposite Parties did not adduce any cogent evidence, contrary to the Surveyor Report, in our considered opinion, the complainant is entitled to a sum of Rs.12,91,750/-, as assessed by the Surveyor.
15. In our considered opinion, there was no justification for delaying the claim of the complainant for more than two years, and, not accepting the recommendation of the Surveyor for paying Rs.12,91,750/-, on net loss basis. Thus, the Opposite Parties were deficient in rendering service and indulged into unfair trade practice.
16. Not only this, the Opposite Parties failed to decide the claim within a reasonable time without any justified reason. The complainant is a proprietorship concern and Sh. Atul Loomba is the proprietor thereof. The proprietor, thus, suffered immense physical harassment and mental agony, at the hands of Opposite Parties No.1 and 2, for which, he is entitled to compensation, and, in our considered opinion, compensation in the sum of Rs.50,000/- shall be reasonable, fair and adequate.
17. Since, the claim is to be paid by Opposite Parties No.1 and 2, being the Insurers, therefore, the complaint qua Opposite Party No.3, who is the Surveyor, deserves to be dismissed.
18. No other point, was urged by the Counsel for the Parties.
19. For the reasons recorded above, the complaint is partly accepted, with costs, against Opposite Parties No.1 and 2, in the following manner:-
i. Opposite Parties No.1 and 2 are directed to pay an amount of Rs.12,91,750/-, as assessed by the Surveyor vide final survey report dated 26.07.2012 (Annexure C-12/R-2) to the complainant; alongwith interest @9% per annum from the date of filing the complaint, within two months of the date of receipt of a certified copy of this order.
ii. Opposite Parties No.1 and 2 are further directed to pay compensation, in the sum of Rs.50,000/- for causing mental agony and physical harassment, to the complainant, within two months, from the date of receipt of a certified copy of this order.
iii. Opposite Parties No.1 and 2 are further directed to pay cost of litigation, to the tune of Rs.11,000/-, to the complainant.
iv. In case the payment of amounts, mentioned in Clauses (i) and (ii), is not made, within the stipulated period, then Opposite Parties No.1 and 2 shall be liable to pay the amounts mentioned in those clauses with interest @12% per annum, from the date of default, till realization, besides payment of cost, to the tune of Rs.11,000/-.
20. However, the complaint qua Opposite Party No.3 is dismissed with no order as to costs.
21. Certified Copies of this order be sent to the parties, free of charge.
22. The file be consigned to Record Room, after due completion.
Pronounced.
February 11, 2014.
Sd/-
[JUSTICE SHAM SUNDER (RETD.)] PRESIDENT Sd/-
[DEV RAJ] MEMBER Sd/-
[PADMA PANDEY] MEMBER Ad STATE COMMISSION (Consumer Complaint No.79 of 2013) Argued by: Sh.
Pankaj Chandgothia, Advocate for the complainant.
Sh. J. P. Nahar, Advocate for the opposite parties.
Dated the 11th day of February 2014.
ORDER Vide our detailed order of the even date, recorded separately, this complaint has been partly accepted with costs qua Opposite Parties No.1 and 2. However, the complaint has been dismissed qua Opposite Party No.3.
Sd/-
(DEV RAJ) MEMBER Sd/-
(JUSTICE SHAM SUNDER (RETD.)) PRESIDENT Sd/-
(PADMA PANDEY) MEMBER Ad