Branch Manager, United India Insurance Co. Ltd vs VAKIL SINGH

THIS is an appeal against the order dated 4.5.1995 passed by District Forum, Meerut in Complaint Case No. 417/1994.

FACTS of the case, in brief, are as under : The complainant filed the complaint for recovery of damages on account of the fact that the Insurance Company has not paid the amount of insurance. According to the complainant, vehicle was insured for a sum of Rs. 1,92,000/-. Jeep was stolen in the night of 31.12.1992/ 1.1.1993. The F.I.R. was got lodged on 1.1.1993. The Insurance Company was also informed on the same day about commission of the theft. The police, after investigation submitted final report on 13.4.1993. When the claim was made to the Insurance Company, Surveyor Sri Rakesh Agrawal was appointed who in his report recommended claim of Rs. 1,72,000/- on account of damages suffered by claimant. It has further been alleged that Insurance Company, after scrutinizing the report of the Surveyor appointed another Surveyor Sri Avinash Chandra who recommended the claim of Rs. 1,15,000/-. According to the complainant he had spent an amount of Rs. 24,570/- during purchase of jeep. The jeep was valued for Rs. 1,91,504/- when purchased on 12.3.1991. The complainant has also claimed Rs. 25,000/- as compensation alongwith interest and compensation @ Rs. 500/- per day for loss on taking another vehicle on rent. He claimed compensation of Rs. 15,000/- which has been spent over and above the purchase of jeep. He has also added interest over the amount of claim.

The opposite party admitted the theft of the jeep but stated that the Surveyor Sri Avinash Chandra had reported a loss of Rs. 1,15,000/- which is the correct amount and it is prepared to pay the same. It is further alleged that Rs. 1,72,000/- claimed by the complainant is wrong. Two petitions were preferred by both the parties before Hon''ble High Court challenged to jurisdiction of the Forum. According to the opposite party, this matter can be settled before Civil Court. It has also been alleged that the jeep is used for commercial purpose, therefore, the claim petition can not be entertained by this Commission.

THE District Forum, after considering the evidence on record has held that the claimant is entitled to a sum of Rs. 1,92,000/- alongwith interest @ 10% thereon. THE claimant was also awarded Rs. 200/- as cost. This was ordered to be paid within a period of two months from the date of judgment. It was also ordered that in case of non-compliance interest @ 18% till the date of payment shall be payable. Aggrieved with the order of the District Forum the claimant has come up in appeal and has challenged the correctness of the order passed by District Forum.

WE have heard learned Counsel for the parties and perused the evidence on record. The first report of Sri Rakesh Agrawal, Surveyor dated 14.2.1993 has not been filed by the appellant before this Commission but only the second report of Sri Avinash Chandra has been filed. We have taken a copy of original report of Sri Rakesh Agrawal for consideration. A perusal of the report goes to show that the vehicle at the time of theft had done about 54,000/- kms. of run. He has mentioned that the vehicle was exclusively used for the personal use of Mr. Vakil Singh but exceptionally it was carrying passengers also. At the time of theft, it was properly locked and parked inside the gate in the night. Therefore, he recommended claim of Rs. 1,72,000/- after allowing depreciation @ 15% as the jeep had run 54,000 kms. from the date of purchasing till the date of theft. The jeep had been stolen within a period of one year and nine months from the date of purchase. Hence, some depreciation has to be taken into consideration. Opposite party has not shown any reason for appointing second Surveyor and argued that second Surveyor was appointed because the first Surveyor has not given any valid reason for recommending the claim of Rs. 1,72,000/-. Now, we have to scrutinize the report of second Surveyor Avinash Chandra dated 19.7.1993. He has mentioned that the jeep was used as a Taxi and must have run 200 kms. per day. Thus taking this average into account, this jeep must have run about 1,40,000 kms. from the date of its purchase. This observation is totally unsupported by any evidence on record. This finding is based on surmises and conjuctures without any foundation. The observation that the jeep was registered as a taxi hence it was being plied as a taxi is also without any basis. There is no evidence on record to support this fact.

THIS is a common knowledge that in India a private car is also unused as taxi. However, the vehicle to be used as taxi can be taken delivery of on priority basis. But this does not mean that the vehicle was used as a taxi. The second Surveyor has not mentioned that he enquired from any person whether the complainant used jeep as taxi. If it was so, he should have recorded the statement of those persons and the Insurance Company would have filed evidence on affidavit of those persons in support of the case that the jeep was running as taxi. There is no presumption in law that if a vehicle is purchased as taxi or is registered as taxi, then it can be used for taxi only. Thus, the observation in the second report that the jeep was being used as taxi can not be accepted.

THE second Surveyor has reported that at the time of theft it was found that the value of the jeep of that make was about Rs. 1,15,000/-. THE Surveyor has not attached the statements of the persons who told about the price of jeep with his report. Also the names of the persons from whom the enquiries were made have not been indicated. THE affidavits of those persons from whom the enquiry was made have also not been filed by the Insurance Company. THErefore, in absence of it, compensation of Rs. 1,15,000/- can not be accepted. It appears that the Insurance Company in order to escape the liability of damages, without any basis appointed second Surveyor. Thus, we do not find any reason to accept the second report which is not based on any evidence or reason and it has been rightly rejected by the learned District Forum. The first report of Sri Rakesh Agrawal dated 14.2.1993 has been produced before us by learned Counsel for appellant. A perusal of his report goes to show that the vehicle was being used by the complainant for his own use and was being parked in his house and the main gate was locked. It also shows that vehicle was stolen sometimes in the night from the compound of complainant''s house. The Surveyor has mentioned that vehicle was sometimes used for carrying passengers but it had no impact as the vehicle was stolen while parked inside the house. Thus, we find that there was no justification for rejecting this report by the Insurance Company and appointing another Surveyor. The findings of the District Forum is perfectly correct on the basis of facts on record.

Learned Counsel for appellant has raised the question of jurisdiction. It has been argued that the question of quantum of damages should be referred to arbitration. This plea has no force and deserves to be rejected outright. In the case of Fair Engineers Pvt. Ltd. & Another v. N.K. Modi, III (1996) CPJ 1 (SC), the Supreme Court had an occasion to consider the impact of Section 34 of Arbitration Act on the cases filed before Forum or Commission.

THE question in that case was whether in view of the agreement of arbitration and Section 34 of Arbitration Act, the Forum and Commission are bound to refer the dispute to arbitration. THE Apex Court on consideration of provisions of law and object of Consumer Protection Act held that the Act was enacted for the benefit and protection of consumer. THErefore, it was further held that a party to the proceedings does not get an automatic right to get the matter referred to arbitration. To quote the words of Apex Court. : "It would thus be clear that by invocation of Section 34, the party to the proceedings does not get an automatic right to have the proceedings pending before the Judicial Authorities stayed. THE said section gives discretion to the Authorities to stay the proceedings on the satisfying that there was no sufficient reason why the matter should not be referred in accordance with the agreement between the parties for arbitration when the party seeking stay of the proceedings was and still remains ready and willing to do all things necessary to the proper conduct of the arbitration. In other words, a judicial satisfaction as to the contract between the parties and subject matter of the dispute to the nature of the dispute, the Judicial Authority has been invested with a discretion to stay the proceedings or proceed with the matter pending before it. Similar power is available under Section 8 of the Arbitration and Conciliation Act, 1996. THE Act was enacted to provide for protection of the interests of consumer and for that purpose the Act has made provision for the establishment of Consumer Councils and other Authorities, viz. District Forums, State Commissions and National Commission for settlement of consumers'' disputes and for matters connected therewith."

Thus in view of above pronouncement of Hon''ble Supreme Court, it is clear that the Forum or Commission has to decide whether the dispute is to be referred to arbitration or not. This has to be decided on the basis of facts. This point has to be considered after applying judicial mind and not mechanically. No fact has been put forward by learned Counsel for appellant to persuade the Commission to refer the matter to arbitration.

AS seen in the earlier part of judgment the Insurance Company without any justification or cogent reason appointed another Surveyor especially when there was no flaw in the first report and the same was impartial and according to the norms of Insurance Company this report was not accepted as the Company was not willing to pay the amount of damages fixed by the 1st Surveyor. The second Surveyor as already pointed out above, gave much less damages to the complainant without any plausible reason. It has been noticed that Insurance Company do not accept the report of 1st Surveyor about loss or damages to the vehicle without any valid reason and go on appointing Surveyor one after the other till the report is palatable/ acceptable to them. Even upto four Surveyors have been appointed in cases by Insurance Companies in succession in order to obtain favourable report. This growing tendency on the part of Insurance Companies has to be depricacted. The Insurance Company should accept a fair report based on reasoning and should not wait for a favourable report. On one hand, the Insurance Companies say that the insurance is based on good faith and bona fide but when the turn of Insurance Company comes to pay the insured amount on happening of an event the good faith and bona fides vanish into the air and the claim is processed and seen from a different angle. Learned Counsel of the appellant has placed reliance on various cases decided by the different Commissions in which it has been held that if an arbitration clause exists in an agreement then matter should be referred to arbitration. All these cases are of no importance and no reliance can be placed on those cases in view of the pronouncement of the Apex Court in the case of Fair Engineers Pvt. Ltd. and Another v. N.K. Modi, (supra).

THUS, we come to the conclusion that the damages assessed by the learned Forum on insured amount is on the higher side. The complainant is entitled to damages of Rs. 1,72,000/- as assessed by 1st Surveyor.

THE Insurance Company has not complied with the order of District Forum within two months of the delivery of judgment, hence interest on the amount of compensation shall be paid at the rate of 18% per annum from July, 1993 till payment. As a sum of Rs. 1,15,000/- has been paid by Insurance Company on 18.12.1995, therefore, interest on this amount shall be payable upto 18.12.1995 @ 18% p.a. and on rest unpaid amount till the amount is paid by insurance Company. THE appeal is, therefore, liable to be allowed in part. ORDER THE appeal is allowed in part. THE complainant is awarded damages of Rs. 1,72,000/- @ 18% per annum interest as damages from July, 1993. THE interest on Rs. 1,15,000/- shall be payable from July, 1993 to 18.12.1995, the date of payment of amount. THE remaining amount of Rs. 57,000/- alongwith interest at the rate of 18% p.a. from July, 1993 till date of payment shall be paid within two months from today. THE complainant-opposite party shall also get costs of Rs. 1,500/- of this appeal. THE judgment and order of learned District Forum shall stand modifed accordingly. Let the copy of this order be made available to the parties as per rule. Appeal partly allowed.