HARYANA STORES (P) LIMITED vs NEW INDIA ASSURANCE COMPANY LIMITED

THIS complaint pertains to grant of compensation on account of rendering negligent and deficient service by the New India Assurance Company Limited under the Consumer Protection Act. The complainant Director, M/s. Haryana Stores Private Limited is the owner of Swaraj Mazda truck registered in Ambala vide Registration No. HR-37-2475. The complainant purchased one insurance policy bearing No. 3135010015513 from the respondent Company, New India Assurance Co. against loss caused to the truck including the third party risk. The said truck during the subsistence of the said policy met with an accident on 13.6.1996 while going to Delhi near Panipat where it suffered a considerable loss and it became un-roadworthy. An F.I.R. No. 132 dated 13.6.1996 under Sections 279, 304-A, I.P.C. was also lodged at Panipat.

THE accident was also reported to the respondent-Assurance Company and a request was made to pay the damages as early as possible as the said vehicle was purchased by the complainant by raising loan from Canara Bank, Chandigarh. THE complainant has averred in the complaint that he made all the attempts for early settlement of the claim because they were incurring three fold losses having interest on the amount outstanding in the loan account of the complainant and secondly due to un-roadworthiness of the vehicle and thirdly the market value was lowering due to continuous depreciation. THE respondent vide its letter dated 18.9.1997 intimated to the complainant that its claim to the tune of Rs. 2,18,500/- has been considered by the Competent Authority and asked the complainant to Complete the following formalities in order to get the claim : "(i) To deposit the Registration Book of the vehicle. (ii) To give an undertaking that no third party claim will be preferred and if claimed the insured will indemnify the claimant. (iii) To deposit the total loss vehicle."

The complainant has averred that the conditions were totally illegal as the Registration Book is not with the complainant but the same is with the police or the Court concerned in F.I.R. case. Secondly, the filing of undertaking regarding the third party claim is not in the hands of the respondent. The complainant has averred in his complaint that the vehicle was completely damaged causing total loss and the market value of the same is Rs. 4.50 lacs and the respondent had allowed a claim of only Rs. 2,18,500/- which is not acceptable as being grossly inadequate. It has been further averred that the non-disbursement of the amount is a clear deficiency on the part of the respondent Company and the basic purpose of getting the vehicle insured is totally futile rather it has aggravated the sufferings of the insured. The complainant has prayed that they are entitled to the market value of the truck as there is total loss of the vehicle. The complainant has prayed for the interest at the rate of 18% per annum on the amount of Rs. 4.50 that works out to be Rs. 2,13,245/- as the same was got financed from the Bank and is paying interest at such a heavy rate. The total claim requested by the complainant amounts to Rs. 6,98,245/- on account of financial losses as mentioned earlier.

In reply to the complaint, the respondent in his written statement dated 9.9.1999 filed through its Counsel Ms. Veena Ashwani Talwar has raised the preliminary objections saying that the respondent has already been sanctioned the claim of the complainant for an amount of Rs. 2,18,500/- subject to his furnishing the requisite documents as stipulated in Para 10 of the complaint. Once the requisite documents are furnished the respondent is ready to disburse the claim amounting to Rs. 2,18,500/-. The respondent has further averred that the complainant has consented to receive an amount of Rs. 2,20,000/- in full and final settlement of the claim and the consent letter is attached as Annexure R-6 the relevant portion of which is reproduced as under : "We hereby agree to accept a sum of Rs. 2,20,000/- (Rupees two lac twenty thousand only), on total loss basis in full and final settlement of our claim subject to the terms and conditions of the policy. Registration Certificate will be transferred in the name of the Company. Thanking you, Yours faithfully, For Haryana Stores Pvt. Ltd. Sd/- Managing Director."

IN view of this averment, the present complaint is not maintainable before this Commission. The second preliminary objection that has been raised is that the complainant has inflated the figures in order to achieve a figure of more than Rs. 5 lacs. Admittedly, the insurance value of the vehicle is only Rs. 3,00,000/- and the complainant consented to settle the claim for an amount of Rs. 2,20,000/-, hence the present complaint before this Commission be dismissed. On merits, the respondent admitted the fact regarding the insurance policy and its validity. The respondent has averred that by way of insurance policy, a contract has been entered into between the complainant and the respondent Company and in case the complainant wants to challenge any of the acts of the respondent Company for non-performance of its contractual obligations, the appropriate Forum is to approach the Civil Court. The present complaint is thus liable to be dismissed. Even otherwise, the respondent averred that there are complex questions of facts and law involved which shall require leading of elaborate evidence and the rights of the parties can be appropriately adjudicated only before a Civil Court.

THE respondent Company had deputed its Surveyor Shri D. Bhatnagar for assessing the loss and other particulars. THE said Surveyor submitted the interim status report on 24.7.1996 copy of which is enclosed as Annexure R-4. THE final report was submitted on 29.1.1997 wherein the liability on repair basis was worked out as Rs. 1,64,061.98 with a further mention that this liability was likely to increase by another Rs. 25,000/- to Rs. 30,000/- when major mechanical assemblies like engine assembly, gear box assembly are dismantled for repairs. THE liability on the total loss basis was worked out to be Rs. 2,18,500/- provided vehicle as it is, was handed over to the Insurance Company and it was accepted that the vehicle shall have a salvage value of Rs. 65,000/-. THE respondent has further averred that the complainants vide their letter dated 24.1.1997 submitted their consent for accepting a sum of Rs. 2,20,000/- on total loss basis in full and final settlement of the claim subject to the terms and conditions of the policy. THE registration certificate would be transferred in the name of the Company. THE copy of the final survey report dated 29.1.1997 is attached as Annexure R-5 and consent letter dated 24.1.1997 is Annexure R-6 with the written statement. The respondent Company as pointed out M/s. Chopra Associates for further investigations and as per their report dated 4.7.1997, a copy of which is enclosed as Annexure R-7, four persons in all were travelling in the abovesaid vehicle a the time of accident. Shri Ajay Gupta, Director of M/s. Haryana Stores (P) Ltd. and Shri Jagdish Parshad an employee of M/s. Ajay Surgical died at the site of accident. The driver and the cleaner had a miraculous escape with minor injuries. The matter was under active consideration of the Company thereafter and certain documents which were required for settlement of claim, were not going to be submitted by the complainant. The Company vide its letters dated 4.2.1997 and 12.3.1997, asked the claimants to complete the requisite formalities. After hearing the learned Counsel for the complainant and the learned Counsel for the respondent and after thoroughly perusing the documents, affidavits of both the parties, we are of the considered view that the preliminary objection regarding the pecuniary jurisdiction is not maintainable because the claim of Rs. 6 lacs is well within the pecuniary jurisdiction of this Commission. However, the Commission find that the complainant has already consented to receive the amount of Rs. 2,20,000/- as per the letter dated 24.1.1997 in full and final settlement of the claim. Since the complainant has settled the dispute with the respondent and has agreed to accept a sum of Rs. 2,20,000/- in full and final settlement of his claim, we do not think it necessary to enter into the arena of facts. It would be sufficient to direct the respondent to release the settled amount as aforesaid, on deposit of Registration Certificate Book and on handing over physical possession of the salvaged vehicle i.e. the damaged truck to an authorized official of the respondent-Assurance Company within a period of one month from the date of communication of this order. The remaining condition of furnishing undertaking to the effect that no third party claim will be preferred to the Assurance Company and if so preferred the complainant would indemnify the payment of the claimed amount, is wholly unreasonable and devoid of any logic and sense. The complainant cannot be saddled with any such liability. We decide the complaint with these directions accordingly. Complaint disposed of.