BHARATKUMAR C.PATEL vs United India Insurance Co.

THE bare facts of this case are practically admitted by both the parties which run as under:

THAT the complainant had insured the Ashok Leyland Truck No.GJ-l-U-3607 with the opposite party, the United India Insurance Company Limited. According to the complainant the new truck was purchased by him on 26.11.90 but for the safety he took insurance effective 26.11.90 to 25.11.91. The truck'' was put to actual use only after a month. The truck while going from Ahmedabad to Madhya Pradesh met with an accident near Bhilai on the night of 6.3.91.

The F.I.R. was lodged on 7.3.91. The complainant was here in Ahmedabad who was informed of the accident. In the meantime the spot survey was made on 11.3.91 by one Mr. A.K. Sen, a qualified automobile consultant and surveyor at the instance of the opposite party. The spot survey report has not been produced by the Insurance Company but at our request the same is shown to us. Kum. S.S. Shah, Advocate for the opposite party states that she will produce the xerox copy tomorrow.

THE spot survey report clearly shows the condition of the vehicle and going through the said report it appears to us that every major part of the truck has been affected and some of the parts have been actually separated. THE surveyor has taken photographs also. THE cleaner and the labourer who were in the truck died and the driver was injured and admitted to hospital. It appears that the complainant reached the spot on 13.3.91 and he was asked to take the vehicle to Ahmedabad since it was not possible to keep it on road on account of theft and other damages. The vehicle was brought to Ahmedabad by another truck. As the complainant stated he had to take out certain parts so that the damaged vehicle can move behind another truck. In para 5 of the complaint the complainant has alleged that on March 15, 1991 they had informed the Insurance Company of the total loss, and in the claim form submitted on 25.3.91 in column 6 thereon they have demanded the amount on the basis of total loss.

THE truck was placed in the garage of Mr. Dosodia, motor body builders who had given the quotation dated 19.3.91 for labour work and an estimate by Automotive Manufacturers Limited regarding parts that might be necessary to be replaced. THE cost of the parts appears to be Rs.1,23,283/-. However, on making further enquiry the complainant alleges that the truck was shown to one Dr. D.A. Desai, who was Chartered Engineer and Registered Valuer for Machineries, Plants, Land and Buildings etc. who was of the opinion that the estimate of repairs might increase the original cost of Rs.4,00,000/- and, therefore, has given the opinion that "considering all the above sighted facts, none of the factor goes in favour of repairs, as the vehicle in question is damaged more than 85 to 90% and as such in my opinion it will be more economical to dispose of this broken vehicle with its broken parts to some scrap dealer and go for a new vehicle than to take 100% risk and attempt to repair the vehicle as the existing extent of damages are so extensive which goes beyond scope of repairs and should be discarded. As against this opinion the Insurance Company relies upon the survey report of Mr. A.G. Shah who has conducted a survey and submitted his report and according to his opinion the truck was repairable and total estimates of repairs approved by him is Rs.1,31,292/-. Both the surveyors'' opinion are diagonically opposite. The complainant is not accepting the report of Mr. A.G. Shah whereas the Insurance Company is not accepting the report of Dr. D. A. Desai and in these circumstances the Insurance Company is not prepared to pay an amount exceeding Rs.1,30,100/- provided the said expense is actually made by the complainant and approved by them after scrutiny. Mr. Gohel, learned Advocate appearing on behalf of the complainant states that his client is not prepared for the reparation because according to him even if the truck is fully repaired it will not give the same satisfactory service as it was giving before the accident. Mr. Gohel further submitted that the Insurance Company is under legal obligation to fully indemnify the complainant as the truck when repaired must give the same performance though it may not fetch the same price being accidented truck. According to Mr. Gohel even if the truck is fully repaired the opinion of the expert is that it will be a useless truck and its performance will not be satisfactory and therefore he has no desire to repair the truck.

KUM. S.S. Shah, learned Advocate appearing on behalf of the Insurance Company relies upon clause 4 of the policy which being material is reproduced. "The Company may at its own option repair reinstate or replace the Motor Vehicle or Part thereof and/or accessories or may pay in cash the amount of the loss or damage and the liability of the Company shall not exceed the actual value of the parts damaged or loss less depreciation plus the reasonable cost of fitting and shall in no case exceed the Insured''s estimate of the value of the Motor Vehicle (including accessories thereon) as pecified in the Schedule or the value of the Motor Vehicle (including accessories thereof) at the time of the loss or damage whichever is less."

KUM. Shah therefore submits that the Company is prepared to give reparation charges which has been certified by Mr. A.G. Shah. She further states that the Insurance Company has an option either to take the truck into total loss or give the reparation charges and thereby tries to give the restricted meaning to clause 4 of the policy.

WE are not inclined to accept the submission of Kum. Shah for the simple reason that under the policy of insurance the Insurance Company is liable to fully indemnify the insured. If there is a doubt that even after the reparation/the truck''s performance would be not satisfactory or the truck is not put in the same condition as it was before the accident occurred such a reparation has no meaning because such reparation will not fully indemnify the insured. However, it is true that the option is with the Insurance Company. Mr. Gohel proposed that if the Insurance Company is of the opinion that the truck is repairable and will be put in the same condition as it was on the date of accident if the Insurance Company exercises the option then he has no objection if the Insurance Company carries out the repairs through their repairers and after the reparation is being done the Insurance Company may obtain a certificate from the approved laboratory like Engineering College or any approved Government Institution certifying the satisfactory performance of the accidented vehicle. Mr. Gohel has further stated quoting the opinion of Dr. Desai that if the Insurance Company wants to repair the truck the Company shall have to spend about Rs. 4 lakhs and even then it will not be repaired to the entire satisfaction.

In these circumstances, we are of the opinion that if the Insurance Company exercises its option to repair the vehicle and if the complainant is not prepared to carry out the reparation through his private repairers it will be the obligation of the Insurance Company to send the truck to the repair shop of their own choice and get it repaired and give the certificate as stated above to show that the truck has been repaired to the entire satisfaction. If the Insurance Company is not prepared to get it repaired through their own repairers they may take the vehicle for a total loss or they may make any other offer as permitted under clause 4. But if they select the option of reparation, according to our opinion, since the complainant is not ready to get it repaired, the Insurance Company will have to repair the same.

WE are also of the opinion that considering the extent of damage and considering the spot survey report and the report of Mr. Shah and Dr. Desai we feel that the truck has been extensively damaged and it is doubtful whether satisfactory repairs can be carried out or not. Considering the facts and circumstances and as a stalmate having arisen because of the strict attitude taken by the Insurance Company forcing the complainant to get the reparation through his repairers which to our opinion is not just or equitable we are constrained to direct that the Insurance Company shall carry out the repairs within 6 weeks from today through their own repairers and obtain a certificate of satisfactory performance from the approved laboratory.

WE are, therefore, giving an option to the Insurance Company to either repair the truck through their own repairers as stated above or take the truck for total loss and pay the damages which would be the price of the truck minus scrap value. Since the Insurance Company has made delay in making the payment of the claim to the complainant it amounts to deficiency in service and the Insurance Company is liable for the loss of interest to the complainant atleast from the date of survey report till the payment is made. ORDER The Insurance Company is directed to pay the insured amount minus the scrap value with interest @ 15% per annum from the date of survey report till the full payment is made or will arrange to get the truck repaired through their own repairers and the truck should be in the same condition as it was on the date of accident with satisfactory performance and a certificate of the recognised laboratory be obtained. The Insurance Company in that case also will pay interest @ 15% per annum from the date of survey report till the actual payment is made on the amount of policy. This interest will include all the damages which the claimant has suffered. The Insurance Company shall also pay the cost of this complaint which is quantified at Rs.1000/-. The liberty is reserved to approach this Commission in case of difficulty. Ordered accordingly.