HARJINDER SINGH JAGIRSINGH vs Oriental Insurance Co. Ltd

BY way of this complaint, the complainant has prayed for compensation in the sum of Rs. 9,47,000/- with interest @ 18% p.a. plus interest and/or tax charged by the Bank of Baroda on the loan account plus compensation in the sum of Rs. 1,50,000/- for mental agony and loss of business and cost of the complaint along with direction that the opponent Insurance Company take possession of the vehicle without no objection certificate or cancellation of HPA along with further direction that the opponent Insurance Company should proceed for cancellation of registration of the vehicle in question.

BRIEF allegations of facts set out in the complaint are: 2(a) The complainants purchased a chassis of truck for Rs. 6,47,245/- in September 1996 and got it insured with opponent Insurance Company. It was given registration No. GJ-6-V-7660. The total cost of the vehicle including body of the truck, insurance, RTO tax, octroi and other charges was around Rs. 8,50,000/-. It was insured with the opponent Insurance Company for the period from 2.9.1996 to 1.9.1997 as per the policy particulars set out in Para 4 of the complaint and Insured''s Estimated Value (IEV) was approved by the opponent Insurance Company at Rs. 7,97,000/-. On 22/23.6.1997, the vehicle met with an accident when it was loaded with pure terephthelic acid at Reliance Industries Limited, Mora, Bhatha, Post Surat, Hajira Road, Surat. The accident occurred when the truck was being taken in reverse direction and a part of the body of the truck came into contact with a loose live electric wire resulting into short circuit with sparks. Fire took place in the loaded material and the whole truck was burnt. FIR was lodged at Ichhapore Police Station by CR No. II 34/1997. Panchnama was also drawn. In or around June 1997, complainant lodged claim with the opponent Insurance Company and furnished all the details and documents. After about lapse of 18 months, the complainant received letter dated 15.12.1998 stating that the higher authorities settled the complainant''s claim on total loss basis at Rs. 3,67,500/- only and the complainant was required to send consent letter. The complainant replied the said letter on 22.12.1998 and requested the opponent Insurance Company to settle the claim for Rs. 7,97,000/-. In the alternative he had shown his willingness to accept Rs. 3,67,500/- keeping open his rights to recover the balance amount through appropriate legal proceedings. On 23.1.1999, a reminder was also sent but of no consequence. On 9.8.1999, notice was sent. But that was also of non-consequence. The complainant has asserted that he obtained loan of Rs. 5,85,000/- from Bank of Baroda and he is required to pay interest @ 18.5% plus interest tax with quarterly rests and the outstanding amount as on 25.3.1998 was Rs. 7,13,883/-. The complainant has, therefore, alleged the opponent Insurance Company is guilty of gross deficiency in service in the facts and circumstances and has prayed for the aforesaid reliefs. Along with the complaint, which was sought to be filed in the year 1999, application was filed for issuance of direction to the opponent Insurance Company for an interim award in the sum of Rs. 3,67,500/- with interest @ 18.5% . As the complainant was required to repay the loan to the Bank of Baroda and as the opponent Insurance Company had already shown willingness to pay that amount, that application was given number as Civil Misc. Application No. 181 of 1999 and that was disposed of and the main matter was given complaint number as stated above. The opponent Insurance Company has resisted the claim as per the written statement Exh. 6. While denying the allegations contained in the complaint, opponent Insurance Company has asserted that the IEV was bifurcated as Rs. 6,47,000/- for cost of the chassis and Rs. 1,50,000/- for cost of accessories, in all Rs. 7,97,000/-. According to the opponent Insurance Company, the accident had taken place on account of negligence of the driver in taking the vehicle in question in reverse direction without taking due care of avoiding the accident. He had taken the truck in reverse direction in full speed resulting into the vehicle coming into contact with live electric wires. Yet, the opponent Insurance Company proceeded to accept the claim and settle it at Rs. 3,67,500/- on non-standard basis. As the complainant refused such payment, there was no deficiency in service on the part of the opponent Insurance Company. The complaint is accordingly sought to be dismissed.

We have heard the learned Advocates for the parties. We have gone through the pleadings of the parties and the material placed on record.

AT the outset it has been contended on behalf of the Insurance Company that the complainant had got insurance of the vehicle in question which was used by him for commercial purpose. However, even if the vehicle was used for commercial purpose prior to 15.3.2003 the complainant could be said to be a ''consumer'' within the meaning of the word ''consumer'' contained in Section 2(1)(d) of the Consumer Protection Act, 1986 vis-a-vis the service to be rendered or rendered by the opponent Insurance Company. Hence, such a contention is not tenable on the face of it. However, on facts, it appears that the complainant had only the vehicle in question which he was plying for his livelihood by means of self employment. In that view of the matter also, the contention cannot be accepted. It has then been contended on behalf of the opponent Insurance Company that there was negligence on the part of the driver of the vehicle in question in taking the vehicle in reverse direction at a high speed. In our considered opinion, this contention is not tenable as no affidavit of the cleaner has been filed. There is no criminal proceeding against the driver from which it can be submitted that there was negligence in the matter of driving of the vehicle at the relevant point of time. This contention will not be available to the opponent Insurance Company since it proceeded to consider the claim and sanctioned it at Rs. 3,67,500/-. We do not have any material form which it can be said that the case was one of award of non-standard claim.

FINALLY, it has been submitted that the value of the chassis was Rs. 6,47,245/-. It was purchased on 3.9.1996 and the accident occurred on 22.6.1997. However, the IEV was given after the accessories were fitted in the vehicle in question. It is not the case of the opponent Insurance Company that value of Rs. 97,000/- was in any way excessive at the time when the insurance was taken. It is pertinent to note that the opponent No. 1 had taken nearly 18 months for settling the claim and giving answer to the complainant in respect of the claim under the policy of insurance in question. Such a gross delay would amount to deficiency in service per se. While the amount of Rs. 3,67,500/- was offered to the complainant, the complainant was not informed as to how it was offered as non-standard claim. The complainant in reply informed the opponent Insurance Company that he might be paid that amount so as to save interest and further expenses and he might keep his right open for his balance claim. Yet, that was not accepted by the opponent Insurance Company who remained silent thereafter. Even the salvage was also not taken by the opponent Insurance Company as offered by the complainant. Bearing in mind all these facts and circumstances of the case, the complainant would be entitled to the market value of the vehicle in question worked out on the basis of IEV @ Rs. 7,97,000/- as per the decision of the honourable National Commission in the case of M/s. National Insurance Company Limited v. Ani Lamba, reported in I (2003) CPJ 229 (NC)=2003 NCJ 286 (NC). Accordingly, depreciation worked out at 5% comes to Rs. 39,850/- and the said amount is required to be deducted and that gives out the value of the vehicle in question at Rs. 7,57,150/-. However, it is not in dispute that originally when the vehicle was purchased and the accessories were fitted, it was a tanker and after due intimation given by the complainant to the opponent Insurance Company and accepted by it, it was converted into a truck. Bearing in mind such circumstances, the complainant appears to have admitted of accepting Rs. 6,50,000/- as can be seen from page 32 of the compilation. It is letter dated 4.9.1997 written by the complainant to the opponent Insurance Company saying that he was prepared to settle the claim on total loss basis in the sum of Rs. 6,50,000/- to Rs. 6,75,000/-. Thus, he was prepared to accept Rs. 6,50,000/- as minimum compensation. In our considered opinion, this amount appears to be just, proper and reasonable, bearing in mind the facts and circumstances of the case. Insofar as the rate of interest is concerned, it would appear that the complainant had taken loan from Bank of Baroda and was liable to pay interest. Besides, there is also delay of around 18 months in settling the claim. Salvage is also not taken by the opponent Insurance Company. Hence, while keeping in mind the decision of the Apex Court in Kaushnumma Begum v. The New India Assurance Company Limited, reported in I (2001) SLT 300=I (2001) ACC 151 (SC)=(2001) 2 SCC P. 9, we propose to award interest @ 10% from 1.9.1997. This date is fixed after considering the passage of three months from the date on which the claim was preferred by the complainant. The opponent Insurance Company will take the salvage and get the registration cancelled. Hence, following order is passed. ORDER Opponent Insurance Company is directed to pay to the complainant Rs. 6,50,000/- with interest @ 10% from 1.9.1997 till payment and cost quantified at Rs. 2,000/- upon the complainant producing No Objection Certificate from Bank of Baroda within 8 weeks from today. In case No Objection Certificate is not produced within that period, opponent Insurance Company is directed to pay the said amount directly to Bank of Baroda in the account of the complainant within two weeks from the expiry of 8 weeks as stated above. Opponent Insurance Company will take possession of the salvage and get the registration cancelled within the aforesaid period. This complaint shall accordingly stand disposed of. Complaint disposed of.