State Consumer Disputes Redressal Commission
National Insurance Co. Ltd vs Umesh Bareja on 4 April, 2006
IN THE STATE COMMISSION : DELHI IN THE STATE COMMISSION : DELHI (Constituted under Section 9 clause (b)of the Consumer Protection Act, 1986 ) Date of Decision: 4th April, 2006 Appeal No A-3432/2000 (Arising from the order dated 16-08-2000 passed by District Forum-II, Institutional Area, Udyog Sadan, New Delhi in Complaint Case No. 5-18/99) National Insurance Co. Ltd. Appellant. D.O. XV, Himalaya House, Through 23, K.G. Marg, Mr. K.L. Nandwani & New Delhi. Mr. Gagan Grover Advocates. Versus 1. Dr. Umesh Bareja Respondent No. 1 D-239, Sarvodaya Enclave, Through New Delhi. Mr. Ramanand Ray, Advocate. 2. Citi Bank Respondent No.2 LIC Building, Connaught Place, Through New Delhi-110001. Mr. Subhro Sanyal Advocate. 3. Competent Automobiles Ltd. Respondent No.3. 895/C-5, Jain Mandir, Dada Bari, Mehrauli, New Delhi-110030. 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, PRESIDENT (ORAL) A Maruti Car model 1997 was insured with the appellant on 31-10-1997 for a period of one year from 16-11-98 to 15-11-1999 for an amount of Rs. 2,21,225- against premium of Rs. 6,318/-. On account of total loss by way of theft the appellant assessed the loss at Rs. 1,35,0090/- being the market value of the vehicle.
2. Vide impugned order dated 16th August 2000 the District Forum has directed the appellant to pay the amount of Rs. 2,21,225/- towards the loss with interest @ 18% from the date of filing of this complaint and compensation of Rs. 5,000/- besides cost of litigation of Rs. 3,000/-.
3. Through this appeal the impugned order has been assailed firstly on the ground that market value of the vehicle was assessed as per policy of the company as well as advertisement in the newspaper and in terms of clause 3 of the policy providing that if the market value is to be assessed on the date of loss, secondly the amount offered was not accepted by the respondent and as such he is not entitled for any interest in such eventuality.
4. We have already taken a view that the insurance company is liable to indemnify the loss as per insured amount less depreciated value of the vehicle. If the contention of the Counsel for the appellant is accepted then the very meaning and object of fixing a particular amount of premium against a particular amount of insurance would be rendered meaningless. If there was an advertisement given by the agency it was more necessary for the insurance company to insure the car for the said amount. Once having accepted the premium against a particular amount the insurance company cannot wriggle out as in our view the market value of the vehicle shall be assessed as to the insurance amount less the depreciated value.
5. Proceeding on the aforesaid premise we modify the direction of the District Forum to pay Rs. 2,21,225/- towards insurance amount by way of giving 10% depreciated value than this amount.
6. As regards the award of interest it was not permissible under the law as interest is awarded where there is a term of contract between the parties or unless there are strong equitable grounds. Otherwise in terms of section 14 of the Consumer Protection Act the District Forum is empowered only to award an amount as compensation as to the loss or injury suffered by a consumer due to the negligence of the opposite party or for any act of the opposite party like unfair trade practice or sale of defective goods etc. as the case may be.
7. This view has been taken by the Supreme Court in Sovintorg (India) Ltd. Vs. State Bank of India, New Delhi (1999) 6 SCC
406. In this case we do not find any strong ground to award interest but at the same enhance compensation from Rs. 5,000/- to Rs. 20,000/- which shall include the cost of litigation also.
5. Appeal is disposed of in aforesaid terms.
6. A copy of this order as per the statutory requirements, be forwarded to the parties free of charge and also to the concerned District Forum and thereafter the file be consigned to Record Room.
7. Announced on the 4th April, 2006.
(Justice J.D. Kapoor) President (Rumnita Mittal) Member jj