ASHOK KUMAR vs National Insurance Co. Ltd.

THIS complaint under Section 12 has been filed against National Insurance Co. by Ashok Kumar complainant praying for a claim of Rs. 5,50,000/- towards the loss incurred by him coupled with Rs. 20,000/- as damages for mental agony, Rs. 5,000/- for taking the Surveyor and making incurring expenses for removal of the truck and Rs. 10,000/- per month as loss caused to him due to non-settlement of claim at an early date.

FACTS leading to this complaint are that the complainant purchased a truck bearing registration No. RJ 20/G 2432 registered with Registration Authority at Kota on 1.11.1996. This vehicle was 1996 model and had been purchased by him after obtaining finance from Alpic Finance Ltd., New Delhi. The truck was got insured on 28.10.1996 and the period covered by the insurance was 28.10.1996 to 27.10.1997. Complainant had paid Rs. 16,909/- as premium and the estimated value of the truck including the accessories as mentioned in the cover note was Rs. 8,50,000/-. As the ill-luck would have it, within ten days of registration the truck while on way from Kota to Udaipur was hit by an another truck bearing No. M.P. 09/K 6491 whose driver it was mentioned in the complaint was driving the truck rashly and negligently. A report of the incident had been lodged at police station Mandal, Distt. Bhilwara. Complainant reported the accident to the Insurance Company who appointed the Surveyor. According to the Surveyor the market price of the salvage was under Rs. 1,80,000/- as the truck had been damaged very badly. When this amount of salvage was found to be on the lower side complainant by making the efforts sold the salvage in the market for the sum of Rs. 3,00,000/- as he had to pay Rs. 200/- per day for keeping the truck in garrage which he had hired and was also paying Rs. 20,000/- per month as instalments to the finance company. Surveyor also later on assessed the cost of the salvage at Rs. 3,00,000/- Complainant, therefore, claimed Rs. 5,50,000/- from the Insurance Company. Insurance Company did not settle the claim at an early date and, therefore, the complainant filed the complaint on 5.6.1997. Reply was submitted and the Insurance Company came with a case that according to its Surveyor the loss was assessed at Rs. 7,74,500/- and minus reduction of Rs. 3,00,000/- as expected salvage value. The complainant was offered a sum of Rs. 4,73,000/- as total loss net of salvage. Insurance Company said that it is always ready and willing to pay Rs. 4,73,000/- which the complainant is not aggreeable to receive as he wants the total loss calculated at Rs. 8,50,000/-.

According to the pleadings of the parties controversy of this case is a very narrow ambit. The complainant has been claiming a sum of Rs. 5,50,000/- after deduction of the salvage amount and the Insurance Company is ready and willing to pay Rs. 4,73,000/- considering the cost of the market value of the truck as Rs. 7,75,000/-. The total dispute on the main amount is of Rs. 77,000/- only. This case has very typical features namely the bad luck of the complainant who had obtained the fitness certificate on 31.10.1996 obtained the permit on 1.11.1996 and met with an accident on 11.11.1996. Therefore, the period intervening between plying of the vehicle is at best ten days and within ten days we cannot conceive of that for the purpose of calculation of the valuation of the vehicle the Surveyor should have reduced the amount by Rs. 75,000/- without showing any reasonable cause to do so. It was only on 28.10.1996 that the Insurance Company itself estimated the value of the vehicle at Rs. 8,50,000/- and if it was a case of total loss it should have paid the amount forthwith. One cannot conceive of that within such a short period the Insurance Company would back out from the estimated value when it had received the premium of Rs. 16,909/- only 12 days before on that amount. The complainant who is not a transport company and has purchased this truck for his livelihood must have been put to tremendous shock when he learnt that within 11 days his truck has met with an accident and it is a total loss.

THE complainant in this case had been extremely fair and has saved a sum of Rs. 1,21,000/- of the Insurance Company, which amount otherwise the Insurance Company was liable to pay to him. THE Surveyor had valued the salvage amount at Rs. 1,80,000/- but the complainant since he had to discharge the obligation of the financier and was further to discharge the loan and save multiplication of interest day-by-day, he made all efforts himself and sold the salvage for a high amount of Rs. 1,21,000/- and this is highly regretable that the Insurance Company on its part had been unfair in reducting the amount of Rs. 75,000/- by reducing the cost of the truck, which met with an accident in less than two weeks of its registration. THE Insurance Company, it is expected from itself with compassion, who have suffered huge losses at the earliest point of time and had become the victim of circumstances. In fact, under the circumstances of the case, any officer of the Insurance Company with all reasonable and prudent mind should have rushed on the spot to console the owner of the vehicle and should have helped them out forthwith in making the payment of the damages caused. It was essential because that the complainant had taken the truck on the hire-purchase and he had to pay instalments with heavy interest to the financier from his own pocket without having any earning. In this view of the matter, we are firmly of the opinion that this is a fit case where the Insurance Company should not have deducted the amount for the honesty of the complainant in selling out the salvage for a sum of Rs. 3 lacs. The complaint is, therefore, allowed, the Insurance Company is directed to pay an amount of Rs. 5,50,000/- alongwith interest @ 12% per annum from the date the claim had been sanctioned. It will also pay a sum of Rs. 5,000/- as the expenses incurred by the complainant in toying the truck to Kota and it shall further pay damages of Rs. 1,00,000/- for mental agony the complainant had suffered. He shall further be entitled to Rs. 5,000/- towards the costs of the complaint. Complaint allowed with costs.