State Consumer Disputes Redressal Commission
The New India Assurance Co. vs Gurdeep Singh on 10 March, 2022
STATE CONSUMER DISPUTES REDRESSAL COMMISSION,
PUNJAB, CHANDIGARH.
First Appeal No.384 of 2021
Date of institution : 29.10.2021
Reserved On : 03.03.2022
Date of decision : 10.03.2022
New India Assurance Co., Chhoti Baradari Branch, Patiala through its
Manager.
....Appellant/Opposite Party
Versus
Gurdeep Singh son of Sh. Ajit Singh, aged about 33 years, r/o Village
Amargarh Nandpur Kesho, Tehsil and District Fatehgarh Sahib.
....Respondent/Complainant
First Appeal under Section 41 of the
Consumer Protection Act, 2019 against the
order dated 14.09.2021 passed by the
District Consumer Disputes Redressal
Commission, Patiala.
Quorum:-
Hon'ble Mrs. Justice Daya Chaudhary, President
Mrs. Urvashi Agnihotri, Member.
1) Whether Reporters of the Newspapers may be allowed to see the Judgment? Yes/No
2) To be referred to the Reporters or not? Yes/No
3) Whether judgment should be reported in the Digest? Yes/No Present:-
For the appellant : Sh. Arun Chander Sharma, Advocate For the respondent : None.
JUSTICE DAYA CHAUDHARY, PRESIDENT The present appeal has been filed by the appellant/opposite party i.e. New India Assurance Company, Chhoti Baradari Branch, Patiala through its Manager to challenge the First Appeal No.384 of 2021 2 impugned order dated 14.09.2021 passed by the District Consumer Disputes Redressal Commission, Patiala (in short, "the District Commission"), whereby the complaint filed by the respondent/complainant was allowed and the appellant/opposite party was directed to pay the claim amount of ₹2,95,000/- to the respondent/complainant along with interest at the rate of 6% per annum from the date of repudiation till payment was released/paid. It was further directed that the compliance of the order was to be made within a period of 45 days from the date of receipt of certified copy of the order.
2. It would be apposite to mention that hereinafter the parties will be referred, as have been arrayed before the District Commission.
3. Briefly, the facts of the case as made out in the complaint filed by the respondent/complainant and are also necessary for adjudication of the present appeal are that the respondent/complainant was owner of Swift Dzire car bearing Registration No.PB-11-BY-5468 and the same was fully insured with the appellant/opposite party, vide insurance policy No.36140031170100002621 for a period from 20.07.2017 to 19.07.2018 and paid an amount of ₹7,436/- as premium for the insurance of the said car. The value of the said car was assessed as ₹2,95,000/-. It was further mentioned in the complaint that one Arshad Khan, a friend of the complainant, took the said car for his domestic use and on 11.10.2017, he along with one Sewa Singh First Appeal No.384 of 2021 3 and Gobinder Kaur went to Shahbad for attending Bhog Ceremony of the relative of Sewa Singh. They were being followed by one Sukhdev Singh, who was also going to attend the Bhog Ceremony in his car bearing Registration No.PB-11-BZ-1428. At about 11.00 a.m., when the car reached near Alishan Food Restaurant near village Nalvi, Shahbad Road, a truck/trolla came from the opposite direction and struck with the car being driven by Arshad Khan, due to which all occupants of the said car died in the accident. The car was also totally damaged. FIR No.520 dated 11.10.2017 was lodged with Police Station, Shahbad, District Kurukshetra under Section 279, 304-A IPC by one Sukhdev Singh, who was witness of the accident. The claim lodged by the complainant with the appellant/opposite party was repudiated, vide letter dated 04.07.2018, on the ground that at the time of accident, there was no insurable interest of insured Mr. Gurdeep Singh/complainant, as said vehicle was used as a taxi. It was further mentioned in the complaint that the act and conduct of the opposite party was totally illegal, unjust and amounted to 'deficiency in service'. It was prayed in the complaint that directions be issued to the appellant/opposite party to pay an amount of ₹2,95,000/- on account of total loss of the car and also to pay an amount of ₹1 lac as compensation along with interest at the rate of 12% per annum from the date of lodging the claim till the payment was released. First Appeal No.384 of 2021 4
4. Said complaint filed by the complainant was opposed by the appellant/opposite party and written reply was also filed. A specific objection was raised with regard to maintainability of the complaint. On merits also, it was submitted that since the car was being used for commercial purpose, the claimant was not entitled for any claim/compensation.
5. After considering the averments made in the complaint as well as in the reply and on hearing the arguments of both the parties, the complaint filed by the respondent/complainant was allowed, vide order dated 14.09.2021 and the appellant/opposite party was directed to pay the claim amount, along with interest, as mentioned above.
6. Said order dated 14.09.2021 passed by the District Commission has been challenged by the appellant Insurance Company by way of filing the present appeal, by raising various grounds. Written arguments/submissions on behalf of the appellant have also been filed in support of grounds of appeal in view of provisions of Regulation No.13 (2) of The Consumer Protection (Consumer Commission Procedure) Regulations, 2020.
7. Notice was issued to the respondent/complainant on 03.11.2021 but none appeared in-spite of service. Thereafter, the case was adjourned on two occasions but still none appeared for the respondent/complainant. It appears that the respondent/complainant was not interested in contesting the appeal.
First Appeal No.384 of 2021 5
8. Mr. Arun Chander Sharma, learned counsel for the appellant/opposite party submits that the District Commission, while passing the impugned order, has totally overlooked/ignored the report of the Investigator, which is on record as Ex.OP-7, wherein it has been reported that the complainant had already sold the vehicle in dispute to one Arshad Khan and said vehicle was used as taxi for commercial purpose. Learned counsel also submits that as per ratio of number of judgments, the Insurance Company is not liable to pay any amount of compensation, in case the vehicle which was insured for domestic purpose was used for commercial purpose at the time of accident. Learned counsel has relied upon judgment of Hon'ble Supreme Court of case titled as National Insurance Company Limited v. Meena Aggarwal as well as judgment of case titled as Vijinder Singh Chauhan v. New India Assurance Co. Ltd. & Anr. in support of his arguments. Learned counsel further submits that the District Commission has also not considered the survey report Ex.OP-4. The loss of vehicle assessed in the report is ₹1,94,000/-, whereas the District Commission has awarded an amount of ₹2,95,000/- and the value of salvage i.e. ₹1 lac has not been deducted. Learned counsel also submits that till date, neither the RC of the vehicle has been got cancelled as per provisions of Section 55 of the Motor Vehicles Act, 1988 nor the value of salvage has been deducted from the amount awarded by the District Commission.
First Appeal No.384 of 2021 6
9. Neither the respondent/complainant nor any counsel on his behalf is present. In the absence of the respondent/complainant, the appeal is being disposed of on the basis of documents available on the file and moreover, the order passed by the District Commission is in favour of the respondent/complainant, which has been carefully perused. Before proceeding further, we have also perused the record of the District Commission and other documents available on the file.
10. Perusal of the impugned order dated 14.09.2021 shows that the complaint filed by the respondent/complainant was allowed and a direction was issued to the appellant/opposite party to pay an amount of ₹2,95,000/- along with interest at the rate of 6% per annum, by mentioning that it was a case of 'Total Loss' of the car and the Insurance Company had assessed the loss at ₹1,94,000/-, which is stated to be wrong and as per survey report, the value of the car was assessed as ₹2,95,000/- at the time of insurance. It has been further mentioned that the Insurance Company had taken full amount of premium for issuing the insurance policy and the officials of the Insurance Company at the time of issuance of the policy were negligent as it was their duty to see, as to whether the car was being driven as taxi or a private vehicle and subsequently the claim was repudiated on the ground that the car in dispute was being driven as taxi has been stated to be illegal, unjust and amounting to 'deficiency in service'.
First Appeal No.384 of 2021 7
11. The order passed by the District Commission has been challenged mainly on the ground that the vehicle in dispute was being used for commercial purpose and it was sold to one Arshad Khan, who was using the same as taxi by carrying passengers namely Sewa Singh and his wife Gobinder Kaur at the time of accident. However, nothing has been brought on record to prove that the vehicle in dispute was sold to Arshad Khan. The car was still in the name of the owner/complainant Gurdeep Singh, as is evident from Registration Certificate (Ex.C-1) and as per stand of the complainant, the said car was given to some family friend, who along with two persons namely Sewa Singh and his wife Gobinder Kaur were travelling to Shahbad to attend Bhog Ceremony of some relative. It is not the case of the opposite party that the driver of the car was not having valid driving licence to drive the car. The car was being driven by Arshad Khan, who also died in the accident. It has come in the statement of the owner/complainant that the said car was given to Arshad Khan, being a friend, for domestic use and not for any commercial purpose. On the basis of intimation, FIR (Ex.C-3) was registered and the opposite party deputed an IRDA approved Surveyor/Loss Assessor and Valuer namely Er. Gurvinder Singh Bahri, who in his Motor Final Survey Report (Ex.OP-4) dated 25.06.2018 assessed the loss to the tune of ₹1,94,000/-.
First Appeal No.384 of 2021 8
12. As per observations of Surveyor in Survey Report (Ex.OP-
4), it is clear that the insured vehicle suffered heavy external and internal losses particularly on front and right sides. Major parts front bumper, front members and grills, head lights, inter cooler, radiator, condenser, fan motor assy., master cylinder assy., clutch cylinder, AC compressor, alternator, pump assy. fuel, fuel injectors 3 nos., starter motor, oil cooler, oil pump assy., tappet cover engine, engine mounting, gear box housing, turbo charger, cylinder head, wiring, catalytic converter, AC pipes, front hood, fender LS & RS etc. of entire car were damaged. It has been stated to be a case of 'Total Loss', whereas the Surveyor has assessed the loss on NOS with RC at ₹1,94,000/-. Value of salvage has been assessed as ₹1 lac. The loss assessed by the Surveyor on NOS basis without RC was to the tune of ₹2,44,000/- (₹2,95,000/- being sum insured, less salvage value of ₹50,000/- and less policy clause of ₹1,000/-). However, in the 'Summary of Tentative Loss', the total amount claimed is shown as ₹5,55,355/- and recommended loss is shown as ₹3,00,764/-. Value of salvage has been assessed as ₹5,964/-. By applying less policy clause to the tune of ₹1,000/- and less salvage value (₹5,964/-) as well as towing charges of ₹1,500/-, the grand total loss has been assessed as ₹2,95,300/-. Although, it is tentative summary of loss, but the assessment of salvage value of ₹1 lac by the Surveyor in his final report is also not based on any cogent and convincing reasons or First Appeal No.384 of 2021 9 evidence. How and on what basis, the salvage has been assessed by the Surveyor, has not been explained in the survey report. Since the car has been extensively/entirely damaged, then how it can fetch salvage value to the tune of ₹1,00,000/- is also not digestible.
13. It is also an admitted fact that the salvage is with the appellant-Insurance Company and the respondent/complainant has not shown any willingness to keep the salvage or even the value of salvage. So, the argument raised by learned counsel for the appellant that the value of salvage should have been deducted from the total value of the car has no force. The question of deduction of amount of salvage arises, only when the complainant party is interested in having the salvage or disputed the amount of salvage so assessed. In the present case, nothing has come in the order passed by the District Commission or in the grounds of appeal or in the arguments raised by the appellant that the complainant was/is interested in retaining the salvage of the vehicle.
14. Otherwise also, the question arises, as to what is the purpose/object to retain the salvage by the complainant by getting lesser amount? It is a case of 100% damaged vehicle and by getting salvage of the damaged vehicle, the appellant/complainant is not going to be benefited in any manner. At the most, the fear in the mind of the owner of the vehicle can be there that the vehicle's registration number may not be misused by any person. RC and salvage are to be First Appeal No.384 of 2021 10 protected by the Insurance Company by bringing this fact to the notice of the Registering Authority. The RC of the vehicle is to be deposited with the concerned Registering Authority, so that there may not be any possibility of misusing the RC by any person. Section 55 of the Motor Vehicles Act, 1988 is relevant, which is reproduced as under:
"55. Cancellation of registration.--
(1) If a motor vehicle has been destroyed or has been rendered permanently incapable of use, the owner shall, within fourteen days or as soon as may be, report the fact to the registering authority within whose jurisdiction he has the residence or place of business where the vehicle is normally kept, as the case may be, and shall forward to the authority the certificate of registration of the vehicle.
(2) The registering authority shall, if it is the original registering authority, cancel the registration and the certificate of registration, or, if it is not, shall forward the report and the certificate of registration to the original registering authority and that authority shall cancel the registration."
15. On perusal of said provision, it is apparent that in case a motor vehicle has been damaged/destroyed or it has been rendered permanently incapable of use, the owner of the vehicle is to report to the Registering Authority within the specified period, within whose jurisdiction the owner has residence or place of business, where the vehicle is normally kept, as the case may, and he is to forward to the Registering Authority the certificate of registration of the vehicle. Sub Section (2) of Section 55 is the action, which is to be taken by the Registering Authority, as it is the responsibility of the Registering First Appeal No.384 of 2021 11 Authority to cancel the registration. The Registering Authority is to forward the report and certificate of registration to the original Registering Authority, which shall be cancelled. Meaning thereby the Registering Authority is ultimately to cancel that registration. By relying upon the provisions of Section 55 of the Motor Vehicles Act, 1988, a circular bearing Ref:IRDA/NL/CIR/MOTOD/118/07/2019 dated 25.07.2019 was circulated by Insurance Regulatory and Development Authority (IRDA) of India to all General Insurers (other than Stand- Alone Health Insurers and Specialized Insurers) regarding the misuse of total loss accidental vehicle documents over stolen vehicles. Through that letter, the insurers were advised to ensure cancellation of certificate of registration of the vehicle in case of total loss claim settlement.
16. It is also relevant to mention that the rate of interest as awarded by the District Commission appears on the lower side being 6% per annum but since no appeal has been filed by the respondent/complainant, we do not deem it appropriate to comment on the rate of interest. The order passed by the District Commission is self speaking and well reasoned and it is based on proper appreciation of evidence. The judgments relied upon by learned counsel for the appellant/opposite party are not relevant in the present context, keeping in view the facts and circumstance of the case. First Appeal No.384 of 2021 12
17. In view of the facts and circumstances as discussed above, the appeal being devoid of any merit is hereby dismissed and the impugned order dated 14.09.2021 passed by the District Commission is upheld. The appellant/opposite party shall comply the impugned order within the period of 45 days of the receipt of certified copy of this order. In view of the circular issued by the IRDA as discussed above, the respondent/complainant is also directed to submit RC of the vehicle in question to the concerned Registering Authority for cancellation thereafter within a period of 30 days from the date of receipt of certified copy of this order.
18. The appellant had deposited a sum of ₹1,76,838/- at the time of filing of the appeal. This amount, along with interest which has accrued thereon, if any, shall be remitted by the Registry to the District Commission forthwith. Respondent/complainant may approach the District Commission for the release of the same and the District Commission may pass appropriate order in this regard in accordance with law.
(JUSTICE DAYA CHAUDHARY) PRESIDENT (URVASHI AGNIHOTRI) MEMBER March 10, 2022.
(Gurmeet S)