JAGJIT SINGH vs ORIENTAL INSURANCE CO LTD

IN this complaint the complainant has sought the compensation of Rs. 1,50,000/ -, the insurance policy amount for which the vehicle was insured along with interest at 18% p.a. thereon. The facts, briefly stated, are as follows: - The complainant got his vehicle bearing registration No. CAM: 1075 insured with the opp. party under a comprehensive policy for the period from 27.6.1989 to 26.6.1990. The said vehicle, when it was on its way to Bangalore from Ahmedabad carrying load, caught fire in the early hours of 1.7.1989 near Tarana Village of Sawanur Taluk, Dharwad District as a result of which the vehicle was completely burnt with its load of cloth bundles.

THE complainant immediately thereafter made a claim with the opp. party for the loss of the vehicle in terms of the comprehensive policy issued by the opp. party. The opp. party arranged to examine the damaged vehicle with its surveyors but on receipt of the report of the surveyors wrongfully repudiated the claim stating that the driver of the vehicle has set fire to the said vehicle. The complainant further averred that such an allegation by the opp. party that it was the driver of the vehicle who had set fire was completely untrue, but even otherwise the comprehensive insurance policy issued by the opp. party covered the loss of damage to the vehicle ''MALICIOUS ACT'' as per Sec. 1(1)(c) of the condition of the policy.

THE complainant further averred that the opp. party failed to satisfy the claim even on repeated requests, and so the complaint.

THE opp. party filed statement of objections and disputed the claim made by the complainant. The opp. party averred that though the vehicle was insured under a comprehensive risk policy for the period as averred by the complainant, the complainant was not entitled to the claim made by him as the driver of the vehicle absconded from the scene after setting fire to the vehicle. The opp. party secured survey reports, analysed the claim and came to the conclusion that the complainant was not entitled for the claim in terms of the policy. As there was no deficiency in service rendered by the opp. party, the claim of the complainant was repudiated.

DURING enquiry the opp. party examined RW1 Sri. Gopinath Rao, Asstt. Divisional Manager and got marked Exs. R -1, the policy issued by the opp. party in respect of the vehicle of the complainant, Ex. R -2, repudiation letter issued by the opp. party and Ex. R -3 the Survey report.

HAVING regard to the facts and in the circumstances of the case, the only point that arises for our consideration is whether there was any deficiency in service rendered by the opp. party in repudiating the claim, if so whether the complainant due to this negligence on the part of the opp. party did suffer any loss or injury and if it is answered in the affirmative to what compensation the complainant is entitled to? The undisputed facts of the case are that the opp. party issued a comprehensive insurance policy in respect of the vehicle bearing registration No. CAM: 1075 owned by the complainant for the period from 27.6.1989 to 26.6.1990 subject to the conditions mentioned therein as per Ex. R -1. It is also not disputed that the vehicle caught fire and burnt during the currency of the said policy on 1.7.1989.

THE risks covered under the policy in respect of own damage are referred at Section of the Policy which read as under: I. The company will idemnify the insured against loss or damage to the Motor Vehicle and/or its accessories whilst thereon. (a) by accidental external means (b) by fire external explosion self -ignition lightning or burglary house breaking theft. (c) by malicious act. (d) whilst in transit by road, rail, in land water way, lift elevator or air. (e) by (i) Riot and strike as per Riot & Strike clause hereon (ii) Earthquake and (iii) Flood including Inundation, Typhoon Hurricane, Cyclone, Hailstrom unless the insured has declared not to insure any specific or all these perils as indicated by reduction in premium described in the schedule of premium hereto. The condition at Sec. 1(c) would show that the damage or loss to the vehicle due to malicious act is also covered.

EX .R -2 is the repudiation letter given by the opp. party repudiating claim for settlement made by the complainant which reads as under: - "Based on the investigation report received by us, we find that the driver of the vehicle has set fire to the same. In view of this being an exclusion under the policy, we are not liable for the said loss. Hence, we are repudiating the claim and closing the file as no claim which please note." This shows that the settlement of the claim was denied by the opp. party alleging that their investigation showed that the driver of the vehicle has set fire to the same. Rw -1, the Asstt. Divisional Manager of the opp. party has also stated that the claim of the complainant was repudiated on receipt of the surveyor''s report stating that the vehicle might have been set fire by the driver.

RW -1 has further stated that he had no personal knowledge about the investigation made by their surveyors and their reports. He has also stated that he was not aware whether the vehicle was burnt by an accidental fire. RW -1 has in the cross -examination further stated thus: - ''As per Sec. 1(c) at Ex.R -1(a), damage to the vehicle due to the malicious act is also covered. Therefore, I say applying this clause i.e., Sec. 1(c) the claim of complainant is tenable. We have repudiated the claim as per the directions of the higher authorities.''

RW -1 has in his evidence in the examination -in -chief stated thus: - ''the regional office directed us to repudiate the claim, consequently we issued repudiation letter as per Ex. R -2.1 say for bonafide reasons as stated above, the claim is repudiated. We are not liable to satisfy the claim.'' From this evidence, it is obvious that the repudiation of the claim was based on the report of the Surveyor which is based on mere conjecture and there is absolutely no basis to come to the conclusion that the driver of the vehicle set fire to the vehicle. Even assuming that there is a possibility of the driver having set fire to the vehicle, there is nothing to show that the driver did so at the behest of the complainant and it is not the case of the respondents that the complainant got the vehicle burnt to claim the benefit of the insurance. The alleged act of the driver, even if true, can only be attributed to malice and if that is so, it is covered by Section I(c) of the Policy referred to above. It is therefore, clear that the repudiation of the claim of the complainant made by the opp. party was improper, unfair and made without application of mind and so amounts to deficiency in service. In the circumstances, therefore, the complainant is entitled for compensation. The complainant has claimed a sum of Rs. 1,50,000/ - the amount for which the vehicle was insured and the interest thereon at 18% p.a.

EX . R -3 is the survey report, the surveyor had assessed the loss as per Ex. R -3(a) which reads as under - "Liability on repair basis 1,41,665.37 Liability on total loss basis 1,19,500.00 Liability on cash loss basis/ Salvage loss basis 1,10,000.00 However, it is left to the discretion of the Insurance Company to settle the claim on any of the above modes of settlement. If the claim is to be settled on repair basis the insured/repairer may be advised to have the vehicle dismantled, when it will be inspected and discussed in detail. The liability may further go up once the vehicle is dismantled, as the above is only an assessment".

RW -1 has further stated that the complainant had agreed for settlement after the receipt of the survey report on cash loss basis at Rs. 1,10,000/ - as shown at Ex. R3 -(a) with no other liability. The complainant has not denied this evidence of RW -1, and so the complainant would be entitled to a sum of Rs. 1,10,000/ - liability on cash loss basis. The complainant has claimed interest at 18% p.a. In our opinion the complainant is entitled for this interest claimed by him because the repudiation of the claim made by the opp. party as referred above was clearly unreasonable and unfair. In the result, therefore, this complaint is allowed. The opp. party is directed to pay a sum of Rs. 1,10,000/ - with interest at 18% p.a. from 1.7.1989 till the date of its payment to the complainant. The opp. party shall pay a sum of Rs. 1,000/ - to the complainant towards costs of this proceeding. The opp. party is directed to pay the sums so awarded to the complainant within a period of six weeks from this day. Complaint allowed with costs. _