State Consumer Disputes Redressal Commission
Sh. Trilok Singh Rawat vs United India Insurance Co. Ltd. on 13 March, 2007
STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND - 10 - STATE CONSUMER DISPUTES REDRESSAL COMMISSION UTTARAKHAND DEHRA DUN FIRST APPEAL NO. 18 / 2006 Sh. Trilok Singh Rawat ......Appellant Versus United India Insurance Co. Ltd. .....Respondent Sh. H.L. Khanna, Learned Attorney for the Appellant Smt. Savita Sethi, Learned Counsel for the Respondent Coram: Hon'ble Justice Irshad Hussain, President Surendra Kumar, Member Ms. Luxmi Singh, Member Dated: 13.03.2007 ORDER
(Per:
Justice Irshad Hussain, President):
This is complainant's appeal against the order dated 19.12.2005 passed by the District Forum, Dehradun, dismissing the consumer complaint No. 238 of 2000.
2. Complainant took loan from State Bank of India, Lamgaon, Tehri Garhwal and purchased new Ashok Leyland Comet Tipper. The vehicle was insured for Rs. 7,30,000/- on 20.07.1999 under comprehensive insurance policy from respondent. On the very first day of its use, vehicle met with an accident when it fell down in a gorge on 24.07.1999 and it resulted in a total loss. The respondent was informed and spot survey was done. The complainant was asked to retrieve the salvage. Complainant preferred claim, which was not settled expeditiously. Complainant alleged that salvage was kept in the premise of M/s Oberai Motors, which charged Rs. 13,000/- for use of their site. The salvage was sold for Rs. 2,75,000/- and complainant was further paid Rs. 4,09,000/- through his financer, State Bank of India, Lamgaon, Tehri, Garhwal on 14.03.2000.
3. Complainant also alleged that because of very great pressure from the bank and the interest on the loan amount multiplying day by day, he kept quite but after receipt of cheque refused to sign the transfer papers of the vehicle in the name of the purchaser (salvage) until and unless he gave an affidavit stating true facts. This had become necessary as the complainant had written a letter dated 04.05.2000 claiming balance amount of claim from the respondent but even after receipt of the letter, the respondent did not even acknowledge the same. According to the complainant, coercive bargaining was done by the respondent in the matter of the claim preferred by him. The complainant, therefore, claimed further sum of Rs. 1,04,000/- together with interest @18% p.a. from 15.03.2000 till actual payment; damages for mental agony and harassment amounting to Rs. 20,000/- and litigation expenses to the tune of Rs. 1,000/- against his claim. The amount of Rs. 1,04,000/- was arrived at as under:
Sl.
No. Particulars Amount (in rupees)
1.
Sum insured payable 7,30,000.00
2. Retrieving expenses 45,000.00
3. Garage charges 13,000.00
4. Total claim payable (1+2+3) 7,88,000.00
5. Amount paid by insurer to State Bank of India 4,09,000.00
6. Paid by purchaser of the salvage 2,75,000.00
7. Total paid (5+6) 6,84,000.00
8. Amount paid less (4-7) 1,04,000.00
4. Respondent resisted the complaint and claim as made above mainly on the ground that the complainant had consented for Rs. 6,90,000/- as compensation on total loss basis against insured sum of Rs. 7,30,000/- on 26.08.1999 and in pursuance thereof, endorsed his consent on the proforma invoice dated 30.07.1999 of vehicle's distributor M/s Oberai Motors, Dehradun. It was alleged that the complainant signed the said document without any undue influence and out of his own free will; that after verification of the valuation by another surveyor and due confirmation from the Regional Office, the agreed amount of compensation had been paid by cheque on 14.03.2000 and the disbursement (claims) voucher was also signed by the complainant apart from his banker. The respondent, therefore, urged that the claim had been settled to the full satisfaction of the complainant and the complaint was filed with false allegation with an attempt to obtain undue advantage and benefits.
5. The District Forum on an appreciation of the material on record observed that the complainant had given his consent for settlement of claim at Rs. 6,90,000/- after discussion with the respondent's Chartered Engineer - Valuer Sh. Rakesh Agarwal and in pursuance thereof signed proforma voucher dated 30.07.1999 of M/s Oberai Motors and finally accepted cheque towards full and final discharge of the claim on 14.03.2000 when the disbursement (claims) voucher was signed by him and his banker. The District Forum also opined that since no protest endorsement was made on the disbursement (claims) voucher by the complainant, it was evident that the complainant had received the amount in full and final discharge of his claim arising out of the accident of his insured vehicle. With these findings, it was held that no deficiency in service was made in the settlement of the claim by the respondent and the complainant was, thus, not held entitled to any further amount of compensation and his complaint was dismissed by the order impugned.
6. The learned Attorney for the complainant persuasively argued that the view taken by the District Forum is incorrect and legally erroneous on account of the failure to properly appraise the evidence on record, which clearly established that the complainant was put into adverse financial circumstances and, therefore, compelled to accept the unconscionable settlement offered by insurer's Chartered Engineer - Valuer and Loss Assessor Sh. Rakesh Agarwal on 26.08.1999 and in pursuance of which, the disbursement (claims) voucher was signed. According to the learned Attorney, a settlement in such a manner, which was result of compelling circumstances, would not estop the consumer from making further claim. Learned Attorney placed reliance on the decision of the Hon'ble Apex Court in the matter of United India Insurance Co. Ltd. Vs. Ajmer Singh Cotton & General Mills & Ors.; 1999 (3) CPR 53 (SC) = II (1999) CPJ 10 (SC). On the other hand, learned counsel for the insurer - respondent urged that since the complainant had accepted the amount agreed thereto against the claim preferred by him and also signed disbursement (claims) voucher voluntarily, there was no occasion for the complainant to make further claim alleging adverse financial circumstances. Learned counsel also sought refuge under the above mentioned decision of the Hon'ble Apex Court by submitting that the settlement was arrived at without any fraud, misrepresentation, undue influence or coercive bargaining.
7. After hearing the learned counsel for the parties and on re-appraisal of the evidence on record, we are of the firm view that it is a case where the complainant has not consented voluntarily for Rs. 6,90,000/- as compensation on total loss basis against the sum assured of Rs. 7,30,000/- when the loss assessment exercise was undertaken by insurer's Chartered Engineer - Valuer Sh. Rakesh Agarwal on 26.08.1999. The settlement referred to in the valuer's report dated 06.09.1999 (Paper Nos. 28 to 36) clearly admit of adverse financial circumstances under which the complainant was put into as a result of accident of insured vehicle on the very first day of its use on 24.07.1999 and was thus compelled to accept the settlement offered by the valuer of the insurer. The compelling circumstances were that the complainant had taken loan from the bank for purchase of the vehicle and have it comprehensively insured for Rs. 7,30,000/-. The vehicle was put in to operation expecting a reasonable return in financial terms to discharge the loan at the earliest to avoid multiplying of the interest day by day. Unfortunately, on the very first day of its use, the vehicle met with an accident and it resulted in total loss thereby depriving the complainant from financial returns. The accident took place on 24.07.1999 and after more than a month, on 26.08.1999, the aforesaid valuer of the insurer paid visit to Dehradun for carrying out detailed inspection of the vehicle as well as verification of the records. Undoubtedly it was a case of close proximity claim, which was bound to be investigated by the insurer thoroughly and the procedure was expected to take considerable time till the claim preferred was to be finally settled after due confirmation from the insurer's Regional Office. In this backdrop, the complainant was put into adverse financial circumstances and despite the sum assured under the policy being Rs. 7,30,000/- and there being absolutely no occasion for any depreciation in the value of the vehicle, the complainant was compelled to give consent for Rs. 6,90,000/- as compensation on total loss basis.
8. The time factor as referred to above was material in this case. We find that the accident having taken place on 24.07.1999 and the insurer's valuer having paid visit to Dehradun on 26.08.1999 for carrying out inspection of the vehicle and verification of the records, the amount of Rs. 4,09,000/- after adjustment of the price of salvage received by the complainant, was deposited with the bank as late as on 14.03.2000 as is evidenced by the disbursement (claims) voucher of the said date (Paper No. 44). The payment was made after the valuer's report was verified by another surveyor Sh. Salahuddin per his report dated 12.02.2000 (Paper Nos. 37 - 38) and thereafter the matter was referred to the Regional Office for confirmation and payment of the compensation as consented thereto under the above circumstances by the complainant. When a period of more than seven months was taken to give final confirmation to the payment of compensation, the complainant was made to understand that much - much longer time may be taken in the settlement of his claim after due contest by the insurer and there can be no doubt that for fear of interest multiplying day by day on the loan taken from the bank and the brand new vehicle having put out of operation on the very first day of its use, the complainant was put into absolute adverse financial circumstances and, therefore, compelled to give consent to the settlement of compensation at Rs. 6,90,000/- offered by the Chartered Engineer - Valuer of the insurer on 26.08.1999. This led to subsequent execution of proforma invoice dated 30.07.1999 (Paper No. 27), although endorsement on it put cloud on the claim of the insurer that the settlement for compensation at Rs. 6,90,000/- was voluntary. The reason being that the endorsement, "subject to the contesting liability of the underwriter's policy terms and conditions, loss is assessed for Rs. 6.90 lacs", available on this document may alternatively be taken to indicate that there was no bilateral final settlement of claim at Rs. 6,90,000/- on 26.08.1999, the date when the Chartered Engineer - Valuer of the insurer paid visit to Dehradun to inspect the vehicle and verification of the records.
9. The above aspect of the matter in turn admits of inference that it was a case of coercive bargaining compelled by circumstances referred above. The complainant has in so many words pleaded in his complaint that despite claim formalities having been completed and no payment having been made, coercive bargaining was started by the insurer in the matter of the claim arising out of the accident of the vehicle. Therefore, in the peculiar circumstances of the case, we see no merit in the argument of the learned counsel for the insurer that the complainant voluntarily consented and agreed for settlement at Rs. 6,90,000/- as compensation against his claim and thereby kept quite and signed disbursement (claims) voucher on 14.03.2000 when cheque for Rs. 4,09,000/- was given to the banker of the complainant. In other words, the pleadings in paragraph No. 6 of the complaint cannot be taken advantage of by the insurer with a view to put the complainant to a disadvantage by recording a finding that the complainant consciously entered into a settlement and kept quite even after the disbursement (claims) voucher was signed by him in full and final discharge of the claim. The reason also being that the complainant soon after on 04.05.2000 submitted his further claim vide representation (Paper Nos. 13 to 14) sent by registered post, which was not even acknowledged thereto by the insurer. The complainant had not slept over his right of making further claim and agitated the matter in the right earnest within a period of less than two months from the tender of the cheque by the insurer to the complainant's banker. Therefore, in view of the decision of the Hon'ble Apex Court in the matter of United India Insurance Co. Ltd. Vs. Ajmer Singh Cotton & General Mills & Ors. (supra), the complainant was legally entitled to make further claim on account of the fact that the complainant was compelled by adverse pressing financial circumstances to give consent to settlement of claim at Rs. 4,09,000/-. The ratio of the reported decision, thus, support the cause of the complainant and we don't think that the decision, as convassed by the learned counsel for the insurer can be taken to create a bar for the complainant from making further claim. The District Forum failed to consider the case in proper prospective and thereby returned incorrect findings as aforesaid. The impugned order is liable to be set aside and the complainant is to be awarded appropriate relief in the case.
10. It need to be seen whether the complainant was entitled to be reimbursed by the insurer in respect of the expenses incurred in retrieving the salvage and having kept the same thereafter in safe custody with the dealer, M/s Oberai Motors. The term 'salvage' mean a thing saved and after deducting all the expenses incurred to save it, the net proceeds of the sale of the salvage are retained by the insured. This apart, policy of insurance is a policy of indemnification against loss and the insurance company is liable to indemnify the insured against the loss actually suffered by him. To indemnify does not merely mean to reimburse in respect of the assured sum but to save from loss in respect of liability against which indemnity has been given. Therefore, the expenses incurred in retrieving the salvage and keeping it in safe custody should also be paid to the complainant to make up the loss occasioned to him.
11. The brand new vehicle was insured for Rs. 7,30,000/- and the same met with an accident on the very first day of its use within four days of the vehicle comprehensively insured with the respondent. There was, thus, no occasion for any depreciation in the value of the vehicle and, therefore, the complainant was entitled to receive the sum assured i.e. Rs. 7,30,000/- on account of total loss of the vehicle. It is not in dispute that the salvage was retrieved from the gorge with great difficulty by the complainant and this aspect of the matter was also taken note of by the insurer's valuer in his report dated 06.09.1999. Complainant filed receipt of Rs. 30,000/- (Paper No. 18) in regard to toeing charges paid for crane facility. In the affidavit dated 24.07.2002 (Paper No. 17), complainant affirmed that Rs. 15,000/- were spent for making road to take out the accidented vehicle with the help of recovery van. Since receipts of the labour charges have not been filed, we would prefer to accept that Rs. 30,000/- in all have been spent in this operation. Complainant further filed receipt for Rs. 11,300/- (Paper No. 19) towards payment of garage charges. We find that the complainant further spent Rs. 11,300/- for safe custody of the salvage. Therefore, the claim which became payable to the complainant is as under:
Sum Assured - Rs. 7,30,000/-
Retrieving Expenses - Rs. 30,000/- Garage Charges - Rs. 11,300/- Total - Rs. 7,71,300/- 12. Against
the above claim, the complainant had been paid Rs. 4,09,000/- through his banker as stated above and further sum of Rs. 2,75,000/- had been received by sale of salvage. The net amount of claim payable to the complainant after deduction of Rs. 6,84,000/- comes to Rs. 87,300/- instead of Rs. 1,04,000/- as claimed by the complainant.
13. The complainant need to be paid the said amount together with interest @9% p.a. from 30.09.2000, the date of filing of the complaint and Rs.
1,000/- as litigation expenses. Since interest is being granted, no further amount for mental agony and harassment is being awarded to the complainant.
14. For the reasons aforesaid, this appeal succeed and the complaint is to be partly allowed in the above terms.
15. Appeal is allowed. Order dated 19.12.2005 of the District Forum is set aside. The complaint is partly allowed and the insurer - respondent is directed to pay Rs. 87,300/- to the complainant together with interest @9% p.a. w.e.f. 30.09.2000 till the actual date of payment and Rs. 1,000/- as cost.
(MS.
LUXMI SINGH) (SURENDRA KUMAR) (JUSTICE IRSHAD HUSSAIN)