K. VARKEY VARGHESE vs Oriental Insurance Co. Ltd.

COMPLAINT for direction to the opposite party to pay compensation as per the policy taken by the complainant for his Pal Peugeot motor car on the allegation, that he suffered damages as the car met with an accident on 21.5.1999.

THE allegations in brief are, complainant, the registered owner of Pal Peugeot car KL-2/C-2907 got it insured with the opposite party for the period from 22.8.1998 to 21.8.1999 and paid the policy amount. At about 5.30 p.m. on 21.5.1999 the car met with an accident at Vallichira; another vehicle which came from the opposite direction collided with his car. THE car was totally damaged. THE accident was reported to the police who registered a crime as Crime No. 208/99 against the driver of the offending vehicle. He also intimated as to the accident to the opposite party, filed Ext. R1 claim and produced the necessary documents. A Surveyor was deputed. Since damage was total, the car could not be repaired, complainant suffered a loss of Rs. 6,91,000/- being the value of the vehicle. THE opposite party is liable to indemnify the complainant for the said amount, though he went to their office and requested for settlement of the claim the opposite party raised untenable contentions. THErefore, he send Ext. P2 notice on 4.6.1999. THEy received it on 7.6.1999, even after the receipt of the notice the opposite party did not settle the claim. THErefore, he wanted direction to the opposite party to pay Rs. 6,91,000/- with compensation. In the version by the opposite parties they maintain, since complicated question of facts and law arises, the complainant has to be referred to civil suit. On being informed that the vehicle met with an accident they immediately issued claim form, on the submission of which they appointed a qualified Surveyor who filed Ext. R7 report. Later, after perusal of the report on considering the damage they deputed another Surveyor, he filed his report Ext. R8. The Surveyor assessed on total loss basis, cash loss basis and salvage basis. The complainant in the meanwhile issued notice demanding Rs. 6,91,000/- being the total value of the vehicle. They replied stating that they are in the receipt of report and are considering the same. The Surveyor who filed Ext. R7 report filed Ext. R9 addendum report assessing on the total loss basis. He reported that the pre-accident market value of the vehicle is Rs. 3,00,000/-. They are willing to settle the claim for Rs. 3,00,000/- and intimated the same to the complainant, but the complainant evaded. They maintain, there is no deficiency of service and wanted dismissal of the complaint.

Complainant was examined as P.W. 1 at his instance a Commission was deputed who filed Ext. CI report. On the side of the opposite parties Exs. Rl to R12 were marked and O.P.W. 1 to O.P.W. 3 were examined.

THE points that would arise for consideration are : (1) Whether the complaint is maintainable ? (2) Whether there is deficiency of service ? (3) What is the compensation to which the complainant is entitled ? (4) Reliefs and costs ?

Point No. 1 : One of the contentions raised by the opposite party in its version is since complicated questions of law and facts arise and the same requires elaborate evidence the dispute has to adjudicated by a Civil Court and consequently the complaint has to be referred to civil suit. The scope of the complaint is to be judged on the basis of the allegations and contentions. Complainant''s case is that his car which was insured with the opposite party met with an accident, though he made a claim without delay till the date of complaint the claim was not settled. He wanted redressal. The opposite parties though did not deny the policy, seeks to maintain that as soon as the claim was received they have taken timely steps by appointing Surveyors and while the matter was pending, the complainant send a notice. In such circumstance according to them there could be no laches on their side. The questions that could arise is, whether there is deficiency of service and the same has to be judged with due regard to the evidence tendered by both parties. Thus the question involved being whether there is deficiency of service and if so, what should be the amount to be awarded for indemnifying the complainant, the same has to be adjudicated only by the FORA. It cannot be said that there is such complicated question of facts or law involved in the matter required to be adjudicated by Civil Court. Consequently the contention of the opposite parties that the complaint is not maintainable cannot be sustained. Point found in favour of the complainant. Points 2, 3 and 4

AS has clearly noted there is no dispute that the complainant''s vehicle had valid policy. Ext. R3 is the policy. This was later renewed by Ext. R6 dated 22.8.1998, when the vehicle met with the accident on 21.5.1999, the policy was in force is not disputed. Complainant submitted Ext. Rl claim dated 27 5.1999 after the receipt of the claim opposite party appointed O.P.W. 2 Surveyor who filed Ext. R7 survey report and later filed Ext. R9 addendum report. They also appointed O.P.W. 3 Surveyor who filed Ext. R8 report. According to the opposite parties in terms of condition No. 3, they decided to settle the claim on total loss basis and they had informed their decision to settle the claim at Rs. 3,00,000/ - suggested by R.W. 7 in Ext. R9 report. The complainant maintains that the same cannot be accepted because he is entitled to the insured amount. According to the learned Counsel for the complainant, not only there is deficiency on account of the delay in settling claim, they were also not willing to settle the claim in favour of the complainant as per the policy conditions. Before going into the question of deficiency of service it is necessary to advert Ext. R12, the original policy. It contains the conditions; condition No. 3 is relied on by the opposite parties to maintain that when there is total loss they need pay the value of the car at the time of the loss or the estimated value in the policy whichever is less. Argument was advanced by the learned Counsel for the complainant stating, since the said clause is ambiguous the same has to be interpreted in favour of the insured, and so interpretted, according to him, since what is referred to there is being value of the car that cannot be equated with the pre-accident value. We cannot say that there is ambiguity in the said clause; a similar clause came up for consideration in O.P. No. 57/98 and this Commission expressed the view that the said clause does not admit of any doubt neither is the same vague capable of two interpretations so that the one in favour of the insured could be preferred. What could be seen is the insurer is given the discretion in the case of total loss to assess the loss taking into account the pre-accident market value of the vehicle. Now one of the arguments of the learned Counsel is that pre-accident market value of the vehicle should be the insured amount. He made reliance on the decision of the Uttar Pradesh State Commission in National Insurance Co. Ltd. & Anr. v. Mrs. Maya Gandhi, I (2000) CPJ 5=2000 (1) CPR 208, wherein it is held that the vehicle shall be deemed to have been insured for which the premium was charged, and in the event of loss the amount for which the vehicle is insured has to be paid by the insurer. Then the learned Counsel made reliance on the decision of the National Commission in Sitha Vednayagam v. New India Assurance Co. Ltd. & Ors., I (1995) CPJ 41 (NC), to maintain that the value of the vehicle has to be the estimated value mentioned in the policy. There the National Commission held that the market value of the boat involved therein is what is mentioned in the contract of insurance as the date of occurrence of the loss was very promixate to the date on which the contract of insurance was entered into. There the contract of insurance was on 29.8.1989 and the occurrence of the loss was on 23.9.1989. This case is distinguishable on facts; as the occurrence of the loss was not that proximate to the contract of insurance. Here, as has noted even the renewal was by Ext. R6 was 22.8.1998 and the accident was on 21.5.1999. The decision in National Commission reported in II (1992) CPJ 484 (NC), Oriental Insurance Co. Ltd. v. Suresh Arjun Karande, in the context of the facts of the case applies. Here the National Commission held, when the policy condition enjoins that the insurer is bound to indemnify the loss by paying the value of the vehicle in the Schedule to the policy or the value of the vehicle at the time of loss or damage whichever is less they are bound to pay only the lesser of the two. Consequently when the said decision is applied the question that would arise for consideration is what is the value of the vehicle at the time of accident, and if the same is a higher value the insured''s liability would be limited to the policy amount. On the other hand the value at the time of accident is less than the value in the policy, then the insurer would be liable to pay only that amount.

IT will be seen that the Commissioner in Ext. CI report only stated that the total loss is Rs. 2,45,216/- but he added that damage to the engine, gear box etc. can be assessed only on dismantling the engine and the loss could be higher than what is assessed. This report cannot be of much help. Then O.P.W. 2 assesses the loss on total loss basis at Rs. 1,82,500/-, on cash loss basis at Rs. 2,06,549.60 and on salvage basis at Rs. 1,75,000/-. The same Assessor O.P.W. 2 in addendum report estimates the pre-accident value of the vehicle at Rs. 3,00,000/-, O.P.W. 3 filed Ext. R8 report in that he also assessed on total loss basis at Rs. 1,82,500/-, cash loss basis at Rs. 1,96,909.81 and salvage loss basis Rs. 1,82,500/-. Thus by virtue of Condition No. 3, the opposite party, insurer is bound to indemnify by paying the per-accident value of the vehicle. R.W. 2, in his cross-examination stated that every vehicle has its own existing market value and the same can be collected from the approved dealers of the second hand vehicle as well; and he says that he enquired with such persons in arriving at the pre-accident value of the vehicle. Incidentally it has to be noted that this Commission in order in O.P. 57/98 has also considered this aspect; in that decision page 252 of Modern Insurance Law, 3rd Edition, by John Birds is referred to, wherein it is stated that ''In respect of goods, the measure of what the insured has lost will prima facie be the market value of the property lost at the time and place of loss in other words, its second hand or resale value''. Therefore, the value to which the complainant could be eligible in the context of the evidence is three lakhs.

NOW the question as to the deficiency of service, whether there was delay in settling the claim has to be gone into. In the complaint, complainant alleged that since no response was heard from the opposite party, he caused to send notice to the opposite parties. The said notice is produced by the opposite party Ext. R2 the same is dated 4.6.1999. The complainant''s case is, he did not receive any reply; whereas the opposite party would maintain that they send a reply, O.P.W. 1 in his evidence said that they had send a reply on 13.7.1999, the copy was marked as Ext. R10. He was asked in the cross-examination whether he has produced acknowledgement, he answered in the negative. As a matter of fact no acknowledgement is produced. P.W. 1 in his evidence denied to his having received the original of Ext. P10. When a person asserts the positive, the burden is on him to prove the same. The person who pleads the negative has no burden in the given facts. Therefore, it has to be taken that no reply was sent. NOW they send Ext. Rll which is the copy of the intimation given to the complainant that the above claim was settled on total loss basis for Rs. 3,00,000/- they enclosed the voucher alongwith the same. This is after the institution of the complaint. The complaint is seen to have been filed on 20.7.1999 and opposite parties entered appearance on 4.11.1999; as has noted the intimation Ext. R11 was on 24.11.1999. Thus Ext. R11 is after the institution of the complaint and also after opposite party entered appearance. Having regard to the facts and circumstance it has to be held that there is delay in settling the claim and the delay, in the given circumstance, ought to have been explained; the failure even to reply the notice sent by the complainant in the circumstance could constitute deficiency. Though Ext. R7 report was on 20.6.1999 Ext. R9 was on 15.9.1999 at any rate when" so much amounts are involved, the settlement had to be expeditious, and when the insured enquired after a reasonable time as to her claim the progress of the claim or the stage it had reached should have been intimated to him Failure would constitute deficiency in service. We have already pointed out, the amount to which the complainant is eligible is the pre-accident market value of the vehicle Rs. 3,00,000/-; but since there is deficiency of service the complainant is entitled to compensation; in the given circumstance interest at the rate of 12% from the date of the notice, 4.6.1999 till payment or recovery can be awarded in lieu of compensation. Points found accordingly.

In the result, the opposite party is directed to pay Rs. 3,00,000/- (Three lakhs) with interest at 12% from 4.6.1999 till payment or recovery. The said amount shall be paid to the complainant within three months from the date of-receipt of the copy of this order. The complainant shall be entitled to his costs which we fix at Rs. 3,000/- (three thousand only). Petition allowed with costs.