Ashok Kumar Mahajan vs National Insurance Company Limited

THIS appeal has been filed by Sh. Ashok Kumar Mahajan against order dated 19.1.2001 passed by the District Consumer Disputes Redressal Forum-II, U.T., Chandigarh (for short hereinafter to be referred as the District Forum-II) in the Complaint Case No. 169 of 1999. The District Forum-II has allowed this complaint with costs of Rs. 1,100/- and directed the opposite party to pay interest @ 12% p.a. from 1.12.1998 till 29.7.1999 on account of Rs. 36,976/-, the assessed damage of the Surveyor.

THE brief facts of the case are given in the succeeding paragraphs. The appellant/complainant, Sh. Ashok Kumar Mahajan, resident of house number 679, Sector 8-B, Chandigarh got his car, bearing Registration No. CHO-1K 8769 model 94, ensured with M/s. National Insurance Company Ltd., respondent/opposite party vide Cover Note No. 944426 dated 11.6.1998 for a sum of Rs. 1,25,000/-. His car met with an accident on 18.8.1998 in Chandigarh. The accident caused total loss of the vehicle. He informed the Insurance Company the same day for on the spot survey which was done by the respondent/opposite party, Insurance Company the same day. The appellant/complainant visited the Branch Office, Divisional Office and the Regional Office number of times for the settlement of his claim but no settlement had been made. He served a registered notice also to the Branch Manager, Regional Manager and the Divisional Manager on 7.1.1999 for an early settlement of the claim. However, he did not receive any reply from the respondent/opposite party, Insurance Company, which led to mental tension and harassment to him besides financial loss. He filed Complaint Case No. 169/1999 in the District Forum-II and prayed that he be compensated for the sum of Rs. 1,25,000/-, the insured value of the car, along with interest @ 18% p.a. from the date of accident and damages of Rs. 50,000/- for causing him mental tension.

The District Forum-II issued notice to the opposite party and proceeded to deal with the complaint case under Sections 13 and 14 of the C.P. Act. In reply the respondent/opposite party - Insurance Company has admitted the introductory facts. The Surveyor assessed the damage of cash loss basis at Rs. 36,976/- to which the complainant agreed. However, there was some difficulty in the verification of the driving licence. Therefore, the case was closed as no claim because the complainant failed to submit requisite documents. The respondent/opposite party-Insurance Company, in reply has given this as the main cause for the delay in settlement of the claim and contended that there is no deficiency in service on its part.

DURING the pendency of the case in the District Forum-II, the Counsel for the opposite party-Insurance Company handed over a cheque of Rs. 36,976/- to the Counsel for the complainant, Sh. Ashok Kumar Mahajan and he accepted it without prejudice to his right in the case. Aggrieved against the judgment of the District Forum-II, the complainant, Sh. Ashok Kumar Mahajan filed appeal under Section 15 of the Consumer Protection Act, 1986 against the impugned order of the District Forum-II.

IN the appeal, the appellant has contended that the respondent Company did not disclose the Surveyor Report dated 30.9.1998. As per the Surveyor Report three options were given by the Surveyor to the Company for recommendation : Repair Loss Basis - Rs. 49,864/- Total Loss Basis - Rs. 70,000/- + Rs. 40,000/-(Rs. 1,10,000/-) Cash Loss Basis - Rs. 36,976/- It has further been submitted in the appeal that on cash loss basis the salvage of the car was of the claimant and the value of salvage at that time was Rs. 40,000/- but the respondent Company did not settle the claim of the complainant on one pretext or the other. In the legal notice dated 7.1.1999 (Annexure C-VIII) the complainant has stated that he is not interested in the cash loss basis for the settlement of the claim but he is interested only on the total loss basis i.e. the sum assured Rs. 1,25,000/- and also stated in the said notice that if the claim was not settled within 10 days, he shall be compelled to move the Consumer Forum. On the inquiry of the licence of the driver of the accidental car, the appellant supplied the old particulars of the driving licence on 3.2.1999 vide affidavit dated 7.7.1999 to Sh. S.P. Singh, Assistant Divisional Manager, which is placed on record. The District Forum-II has dealt with the case in detail and found that the respondent-Insurance Company took the plea that the driver of the car was not having valid licence and the appellant/complainant had not supplied the particulars of the driving licence and hence the case of the complainant was closed for no claims. The appellant contended that respondent-Insurance Company had intentionally made this case as no claim and indulged in the deficiency in service which the District Forum-II has also categorically held that the Insurance Company is guilty of deficiency in service and delaying the payment of the amount to the complainant.

IN para 5 of the judgment, the District Forum-II, has explained that while assessing the damage of the car, the Surveyor had laid down three options. The complainant could be paid Rs. 49,864/- on repair basis, Rs. 70,000/- were assessed on account of total loss basis and Rs. 36,976/- were fixed on cash loss basis. The complainant having agreed to accept the amount of cash loss basis, the respondent-INsurance Company offered that amount to the complainant and actually paid that during the pendency of the case.

THE District Forum-II has brought out that the report of the Surveyor is dated 30.9.1998 and the complaint was filed in the Forum on 1.3.1999. Had the complainant not agreed to accept the compensation on cash loss basis, he would have raised necessary plea in the complaint itself. Having failed to do so, the complainant could not be allowed to argue this point and the argument is thus, repelled by the District Forum-II. THE District Forum-II has very rightly come to the conclusion that the Insurance Company is guilty of deficiency in service by delaying the payment of the amount to the complainant. THE Surveyor submitted his report on 30.9.1998 and the opposite party should have settled the claim within a period of 2 months which it did not do so and took its own time. It was only in the month of January, 1999 that the Insurance Company-opposite party wrote a letter to the complainant to clarify the position regarding the driving licence. This was inspite of the fact that the Surveyor recorded in his report that he had checked the driving licence as produced before him. THE District Forum-II has rightly brought out that the Surveyor did not point out any defect in the driving licence. THE Insurance Company ultimately paid the amount and this means there was no invalidity in the driving licence. THE District Forum-II failed to appreciate that the complainant had accepted a sum of Rs. 36,976/- on cash loss basis before the District Forum-II without prejudice to his rights in the case and in the complaint he had categorically requested for the compensation on total loss basis. Upon filing the appeal, notice of the appeal was issued to the respondent, who put appearance through Mrs. Vandana Malhotra, Advocate, while appellant has been represented by Mr. Rakesh Bhatia, Advocate. Record of the complaint case was summoned in triplicate from the District Forum-II.

We have heard the learned Counsel for the appellant, Mr. Rakesh Bhatia, Advocate and the learned Counsel for the respondent, Mrs. Vandana Malhotra, Advocate. We have also perused the record of the complaint case and documents adduced therein along with grounds of appeal with utmost care and circumspection. We have carefully examined the order of the District Forum-II.

THE learned Counsel for the appellant contended that the respondent Company did not disclose the Surveyor Report dated 30.9.1998, where the three options were given by the Surveyor to the Company for recommendations. He argued that on the cash loss basis, the salvage of the car was of the complainant and the value of salvage at that time was Rs. 40,000/- but the respondent Company did not settle the claim of the complainant for one reason or the other. THE issue of the invalid driving licence was raised by the Insurance Company just to delay the matter when it was clearly brought out by the Surveyor that he had checked the driving licence to be valid. THE learned Counsel for the appellant further contended that the appellant kept the salvage of the car which at that time was of worth Rs. 40,000/- and paid Rs. 1,500/- per month as a rent and now the value of the salvage had depreciated to Rs. 10,000/- due to deterioration of the passage of time and the learned Counsel prayed that the cost of the rent paid by the appellant should be paid by the Insurance Company, in case his prayer for getting the compensation of the car on total loss basis, which the Surveyor has recommended (Rs. 1,10,000/-). THE appellant at that time had received Rs. 36,976/- without prejudice to the right of the case. He has pleaded that the order of the District Forum-II be set aside and the appellant be compensated on the total loss basis which comes to Rs. 1, 10,000/-. Learned Counsel for the respondent - Company, Mrs. Vandana Malhotra, Advocate contended that there is no deficiency in service on the part of the respondent Company because it had not delayed the payment of cash loss basis to the appellant/complainant. The doubt had risen in the Insurance Company regarding the validity of the licence because the appellant/complainant had not mentioned it in his original complaint. Once, the appellant/complainant had accepted a sum of Rs. 36,976/- on the cash loss basis, he is not entitled to any other compensation. The learned Counsel for the respondent further contended that the judgment of the District Forum-II is absolutely in order and should be upheld.

THE appellant/complainant, Ashok Kumar Mahajan kept the salvaged car in a garage where he claims to have paid a sum of Rs. 1,500/- per month as rent. He has claimed this amount from the respondent-Insurance Company in the appeal filed in the Commission. THE plea of the appellant/complainant, therefore, cannot be accepted for reimbursing the rent charges for keeping the salvaged vehicle in the garage. Though the appellant/complainant had accepted a sum of Rs. 36,976/- as the compensation on cash loss basis, yet he had prayed in the complaint case in the District Forum-II that he be given compensation on total loss basis which has been recommended by the Surveyor also. THE District Forum-II has somehow missed this particular prayer and had not appreciated that once the deficiency on the part of the opposite party has been established, the appellant/complainant, is therefore, entitled to get the compensation on the total loss basis which comes to Rs. 1,10,000/-. In view of the above discussion, we are of the considered opinion that the District Forum-II has rightly come to the conclusion that the respondent-Insurance Company is guilty of deficiency in service. We affirm the judgment of the District Forum-II subject to modification that the respondent-Insurance Company is liable to pay compensation to the tune of Rs. 1,10,000/- on total loss basis to the complainant less Rs. 36,976/- (already paid to the complainant in the District Forum-II on cash loss basis). The appellant/complainant shall return the salvage of the vehicle within two months of the receipt of this order. Copy of the order be supplied to the parties free of charges. Appeal disposed of.