HARJINDER PAL SINGH Vs NATIONAL INSURANCE COMPANY LTD. & ANR.

This revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 against the impugned order dated 21.12.2012, passed by the Punjab State Consumer Disputes Redressal Commission (hereinafter referred to as the State Commission) in First Appeal No. 1318/2012, Harjinder Pal Singh vs. National Insurance Co. Ltd. & Anr., vide which, while dismissing the appeal, the order passed by the District Consumer Disputes Redressal Forum, Bathinda on 03.08.2012 in Consumer Complaint No. 50 of 09.02.2012, allowing the said complaint was upheld and the award given by the District Forum was sustained.

The petitioner/complainant, Harjinder Pal Singh, obtained an insurance policy for his Hyundai Tuscon car, bearing no. HR 29N 2553, valid from 24.06.2010 to 23.06.2011 for an assured sum of 6 lakhs and a premium of 15,711/- was paid for the purpose. The said car met with an accident on 20.01.2011 within the revenue limits of police station Gidderbaha, District Muktsar and FIR No. 7 dated 20.01.2011 was registered at the said police station. The said car is stated to have suffered total damage during the accident. The petitioner/complainant, through his consumer complaint demanded that since it was a case of total loss, the assured sum of 6 lakhs be paid to him, with 18% interest alongwith a compensation of 50,000/- for mental agony and 50,000/- as litigation expenses. The complaint was resisted by the Insurance Company by filing a written statement before the District Forum, saying that the District Forum at Bathinda had no territorial jurisdiction to handle the complaint, because the accident had taken place within the revenue limits of the Muktsar District and the policy was also issued by their office in District Muktsar. They also stated that intricate questions of law and facts were involved in the present complaint, which required production of voluminous documents and hence, a Civil Court of competent jurisdiction only could handle the matter. The opposite party also stated that the car was being driven at the time of accident by a handicapped person namely Gurmeet Singh, who was not holding a valid and effective licence. It was only at the time of processing of the claim that the petitioner/complainant stated that Gagan Kumar was driving the vehicle on that day. Since there was violation of the terms and conditions of the policy as the driver of the vehicle had no valid license, the claim was not payable. The District Forum, after taking into account the evidence of the parties, directed the opposite party, Insurance Company to pay an amount of 2,74,000/- alongwith interest @ 9% per annum from the date of the complaint i.e. 09.02.2012 till realisation. This order was based on the report of the surveyor M/s. R. P. Bhasin & Co., appointed by the Insurance Company. Being aggrieved against this order, the petitioner/complainant challenged the same by way of an appeal before the State Commission. The said appeal was, however, dismissed in limine by the State Commission without even issuing notice to the respondents. Being aggrieved against this order, the petitioner/complainant has filed the present revision petition, requesting for enhancement of the compensation awarded by the Consumer Fora below.

During hearing, the learned counsel for the petitioner/complainant stated that as per the report of the surveyor, it was a case of total loss as the damage to the vehicle was more than 75%. The learned counsel has drawn attention to the survey report, submitted by M/s. R. P. Bhasin & Co. in which the following has been stated about the salvage value of the vehicle:- "Salvage Value- The vehicle may fetch a sum of 2,40,000/- to 2,50,000/-, only if disposed off immediately on tenders".

The learned counsel argued that although the surveyor had concluded that the value of the salvage was between 2.4 to 2.5 lakhs but while making the assessment of the payable amount on ''net of salvage'' basis, the surveyor had wrongly deducted a sum of 3.25 lakhs in place of 2.4 to 2.5 lakhs, as stated in the body of the surveyor''s report. The net amount payable had therefore, been wrongly calculated by the surveyor, may be due to some inadvertent error. The net payable amount should, therefore, be computed after taking the salvage value as 2.4 or 2.5 lakhs. The learned counsel further stated that the petitioner/complainant were liable to be paid interest on the claimed amount as there was delay of about 17 to 18 months on the part of the opposite party, Insurance Company in making the payment. The accident took place on 20.01.2011, whereas the report of the surveyor was submitted to the Insurance Company on 20.07.2011, but still the payment of the claim was made in September, 2012. The petitioners were entitled to reasonable interest on the amount of claim as laid down in Regulation 9 of the Insurance Regulatory and Development Authority (IRDA) Regulations. The State Commission had dismissed their appeal in limine without even issuing notice to the opposite party and hence, the impugned order was not valid in the eyes of law.

The learned counsel for the opposite party, Insurance Company, however, stated that the order passed by the District Forum was bad in the eyes of law, because the said District Forum at Bathinda had no territorial jurisdiction of taking stock of the matter, because the policy was issued in District Muktsar and the accident also took place in District Muktsar. There was no cause of action, therefore, in District Bathinda. The learned counsel has drawn attention to the orders passed by this Commission on 04.02.2015, in Revision Petition No. 4902 to 4904 of 2012, in which the issue of jurisdiction has been adequately dealt with. Regarding the value of the salvage, the learned counsel stated that the insured had made an offer to take the salvage at 3.25 lakhs and hence, the amount of 3.25 lakhs was deducted from the Insured Declared Value (IDV) of the vehicle, while making calculations by the surveyor.

I have examined the entire material on record and given a thoughtful consideration to the arguments advanced by the learned counsel for the parties.

Vide order dated 03.08.2012, the District Forum at Bathinda allowed the complaint and awarded payment of 2,74,000/- to the petitioner/complainant, based on the report of the Surveyor alongwith compensation of 5000/-. It was also stated that the payment of the amount should be made within 45 days of the order, failing which interest @ 9% per annum shall have to be paid from the date of the complaint i.e. 09.02.2012 till realisation. An appeal made against the said order by the complainant only was dismissed in limine by the State Commission. However, it is very clear from record that the said orders of the District Forum or the State Commission were never challenged by the Insurance Company anywhere and hence, the same have attained finality qua the Insurance Company. In the present revision petition filed by the complainant, therefore, the Insurance Company have no right to raise the issue of territorial jurisdiction or the issue of possession of valid and effective license by the driver of the vehicle at the time of the accident. However, considering the material available on record, it is clear that the opposite party, Insurance Company has its branch at Malout, District Muktsar, which issued the insurance policy. The said branch is controlled by its Divisional Office at Bathinda. The claim filed is stated to have been sent by the branch office to the Divisional Office and the surveyor also submitted its report to the Divisional Office, Bathinda. The District Forum have, therefore, rightly taken the view that the contention of the opposite party that no cause of action had arisen in Bathinda, was not tenable. The District Forum rightly concluded that they had the territorial jurisdiction to decide the complaint. The State Commission have decided the appeal vide impugned order without issuing notice to the opposite party/Insurance Company. The observations made by the State Commission regarding the territorial jurisdiction are not valid in the eyes of law. Since the opposite party, Insurance Company has not challenged the order of the District Forum, the State Commission should not have made observations regarding territorial jurisdiction or license of the driver.

The main point for consideration is whether the payable amount has been rightly computed by the surveyor and whether the petitioners are liable to be given interest on the paid amount from the date of the complaint or not. A perusal of the survey report given by M/s. R. P. Bhasin & Co. says in categorical terms that the salvage value was between 2.4 to 2.5 lakhs, because the said sum was likely to be received, if the vehicle was disposed of immediately on tenders. It has not been made clear anywhere how the surveyor deducted an amount of 3.25 lakhs as salvage value from the IDV of the vehicle, while computing the amount of claim. There is nothing on record to prove that the petitioner/complainant made an offer to get the salvage at 3.25 lakhs. It seems justified, therefore, that the computation of the claim should be made after deducting a sum of 2,40,000/- from the IDV of the vehicle, meaning thereby that the petitioner/complainant shall be entitled to get an additional sum of 3,25,000/- minus 2,40,000/- = 85,000/- from the opposite party, Insurance Company towards the insurance claim for the damaged vehicle., It is held, therefore, that in addition to a sum of 2,74,000/- allowed by the District Forum, the petitioner/complainant is entitled to a further sum of 85,000/- under the insurance policy.

In so far as the payment of interest is concerned, the claim of the petitioner/complainant seems to be justified on this account also, because no valid explanation has been furnished by the opposite party, Insurance Company in the delay in making payment of claim to the petitioner/complainant. I do find weight in the contention raised by the learned counsel for the petitioner/complainant that as per Regulation 9 of IRDA Regulations, 2002, the petitioner/complainant is entitled for the interest on the amount claimed. It is ordered, therefore, that the interest on the amount of 2,74,000/- and the additional amount of 85,000/-, i.e. a total of 3,59,000/- shall be payable to the petitioner/complainant @ 9% per annum w.e.f. the date of the complaint i.e. 09.02.2012 till realisation. This revision petition is, therefore, allowed in terms of the observations above and the orders passed by the consumer fora below shall stand modified accordingly. There shall be no order as to costs.