KAMALASH SINGH vs NATIONAL INSURANCE CO

- THE case of complainant in brief is that the complainant Sri Kamalesh Singh, an unemployed young man, purchased a HM trekker for his livelihood through a financier M/s. Auto credit Corporation Ltd., in the month of July, 91. THE said trekker was insured under comprehensive insurance scheme of National Insurance Co. Ltd., Calcutta Branch No. X. THE said vehicle was plying at Begusarai bearing No. BR-1A-2238 was declared fit and was permitted by the Regional Transport Authority, Bihar to carry 11 passengers on contract basis. THE said vehicle met with an accident on 26.3.91 at Begusarai which caused death of an unidentified pedestrian which infuriated an assembled mob who set the vehicle on fire and the vehicle was transformed into ashes except the completely damaged skeleton and afterwards, the remaining, skeleton was thrown into the ditch by the side of National High Way by the infurious mob. THE traffic police on the spot lodged FIR with the Police Station on the same date, i.e. on 26.3.91. THE complainant informed about the said incident to the opposite parties in writing on 28.3.91. Accordingly, spot surveyor, appointed by the opposite parties Nos. 1 to 3 submitted his report on 11.4.91 about total loss of the vehicle and observed the same is being irreparable alongwith photographs showing the completely burnt and damaged skeleton of the vehicle in toppled condition.

THE complainant submitted the prescribed Claim Form" duly filled-in in the month of April ''91 with the claim for total loss as per covered value of Rs. 1,22,000/- by the insurance policy No. 10-10-00-6305146-0 valid from 11.7.90 to 10.7.91 before the opposite parties. After extensive follow-up, the opposite parties appointed on 3.5.91 one surveyor M/s. C.S. & S. B. for final report which was intimated to the complainant over telephone on 8.5.91. In the meantime, the Motor Vehicle Inspector submitted his report on 24.4.91 indicating about the total loss of the vehicle. It is further alleged by the complainant that the said surveyor completed his survey work from 14.5.91 to 16.5.91. It is also alleged that the surveyor, without inspection of the vehicle, only accepting the papers from the complainant at Calcutta, submitted his report assessing the loss at 30% of the insured value. It has been further alleged by the complainant that the opposite parties Nos. 1 to 3 did not settle the claim of the complainant until such time of filing of this petition of the complainant. Consequently the complainant filed this complaint praying for relief for payment of total loss as per covered value of the vehicle, i.e. the current price of the vehicle alongwith damages for the loss of business on account of non-settlement of the claim due to serious negligence on the part of opposite parties Nos. 1 to 3 hereinafter referred to as Insurers. The objections raised by the learned Advocate on behalf of the insurers inter alia are that the proceeding is not maintainable as there is no deficiency in service on the part of opposite parties Nos. 1 to 3 and that the issues involved in the matter requires elaborate oral and documentary evidences which is not possible to adjudicate other than the Civil Court. And on this count, the said opposite parties, referred to two decisions, firstly, the case of M/s. Special Machine v. P.N.B. reported in 1991 (1) CPR 52 (NC) and another case of Kongaru Anantha Ram v. Family Super Market Janata Bazar and Others, reported in 1991 (1) CPR 300 (SC Hyderabad). Further, the insurers contended and/or alleged that the driving licence of the driver of the captioned trekker was defective and was not in accordance with the Motor Vehicles Act and the Rules in force. The insurers further alleged that the permit of the captioned vehicle was also not valid. And finally, the insurers strongly relied upon the final survey report submitted on 1.7.91 by the surveyors, M/s. Commercial Surveyor & Salvager Bureau. Accordingly, the insurers prayed for dismissal of the complaint.

In the aforesaid context of the case, the following issues are framed for our consideration: (1) Is the complaint maintainable under the provisions of "Consumer Protection Act"? Was there any deficiency in service on the part of opposite parties? (2) Was the permit of the trekker valid and was the trekker fit for plying on the road? (3) Was not the driving licence of the driver of the captioned vehicle valid or in accordance with the Motor Vehicles Act and Rules? (4) Is the complainant entitled to claim the loss as prayed for? (5) Was there any negligence on the part of the Insurance Co. to settle the claim of the complainant? (6) To what relief/reliefs the complainant is entitled to in law and equity. Decisions with reasons:

ISSUE No. 1. As regards issue No. 1, the learned Advocate, appearing on behalf of the complainant, submitted that the petition of the complainant is well maintainable under the provision of Consumer Protection Act, 1986 inasmuch as service defined under Section 2(1)(g) of the Consumer Protection Act includes "Insurance". As the captioned trekker was covered under the valid comprehensive insurance policy No. 10-10-006305146-0 issued by the insurers against the consideration by way of payment of the premium, thus comes within the definition of service as mentioned above. He also pointed out that the deficiency in service as defined under act means "any fault, imperfection, short-fall or inadequacy in the quality, nature and manner of performance which is required to be maintained by or under any la w for the time being in force or has been undertaken to be performed by the person in pursuance of a contract in relation to any service". Here, the issuance of the said insurance policy against payment of the consideration creates contractual obligation on the part of the insurer who covered the comprehensive risk of the trekker by accepting the said insurance policy. As such, the complainant/insured is entitled to, the covered amount of the policy in the event of total loss of the captioned trekker. But, the insurers neither settled the claim nor refused the same showing sufficient reason therefor. The said action on the part of the insurers is definitely deficiency in the service within the meaning of it under the Act. It was also submitted by the learned Advocate of the complainant that the delay and/or non-settlement of the complainant''s claim caused irrepairable loss and damage to the complainant. He further submitted that due to serious negligence on the part of the insurers for a long time, the insured has suffered from mental agony, anxiety and harassment and also have incurred huge expenses on account of frequent travels from Begusarai, the place of accident, to Calcutta, Boarding and lodging charges, etc. during the period of more than years. As such, there is serious deficiency in service on the part of the insurers. As regards the references to the case of Special Machine (supra), the learned Advocate of the complainant submitted that the said case is not applicable in the least to the context of the present case. The facts and circumstances of the case of Special Machine (supra) are completely different from the fact and circumstances of the present case. In the case of M/s. Special Machine (supra), the complaint pertaining to a transaction borrowing from bank was raised. The allegation was that the bank had not extended and made available to the petitioner all the facilities and financial assistance which were required for his small scale industrial unit. It was held that the proper Forum to agitate the said grievance is Civil Court. The proceeding under the Act cannot be invoked for seeking relief of this nature. Failure to provide financial facility or assistance cannot be said to constitute deficiency in service as defined in Section 2(1)(g) of the act. It was further held in the said case of Special Machine (Supra) that the subject matter of complaint was subjudice before the ordinary Civil Court before coming to the Consumers Redressal Forum. As such, there is clear over-lapping and un-winning of the question arising for determination of the suit and those who were again sought to be adjudicated in the complaint. The concurrent adjudication in respect of the same case will not be conducted by the Commission under the Act. The complaint petition by the complainant consisting of 69 pages detailed out various allegations in respect of damages demanding Rs. 3489.39 lakhs spread over for 12 years to be paid by the respondent Bank. Further, the respondent Bank as plaintiff filed a civil suit for recovery of Rs. 1,36,13,909/-long before the complaint was made to Consumer Redressal Forum against the complainant who in turn also sought for damages as counterclaim against the respondent Bank, accordingly it was held that such elaborate scrutiny and settlement of accounts can be satisfactorily undertaken in a Civil Court.

SIMILARLY, the case of Kongaru Anantha Ram was dismissed both by District Forum and the State Commission on the ground that ''Neko'' soap is a medicated soap and the condition as laid down by the Drug Controller was duly engraved on the wrapper, so it was not necessary to indicate in the wrapper of the soap the percentage of total fatty materials as was urged by complainant/appellant. The Id. Advocate appearing on behalf of the complainant argued that the facts of the present case under any stretch of imagination cannot be found to have any similarity with those cases. The present case is very simple in nature as is revealed from the facts of the case, i.e., the insured trekker was completely destroyed except the damaged skeleton. Accordingly, the complainant is entitled to receive the insured value of the trekker as per policy for the said total loss in accordance with the provision of law. The learned Advocate of the complainant, further argued, even assuming, but not admitting that the present case of the complainant involved intricated questions of facts and laws and then also the Commission is obliged to entertain such complaint in view of the ratio laid down in case of Sarda Ben & Ors. v. Gujarat Gas Supply Co. reported in I (1992) CPJ 225 (NC) where the National Commission over-ruled the decision of Gujarat State Commission which declined to exercise jurisdiction on the ground that disputed question of facts and laws are involved and huge evidence has to be recorded. He, therefore, submitted that the complainant''s petition is well maintainable before this State Commission. We also agree to the views (if complainant that the petition of the complainant maintainable with this State Commission and there is deficiency in service on the part of insurers, so, this issue is decided in favour of the complainant. Issue No. 2. With regards issue No. 2, the permit of the trekker/taxi No. BR-1A-2238 issued by the inspecting authority was produced before us from which it appears that the permit was valid from 14.12.90 to 10.4.91 and fit certificate in respect of the captioned trekker was also produced valid from 31.7.90 to 30.7.92, wherein we do not find any irregularity at all. So this issue is also decided in favour of the complainant. Issue No. 3. With regard to this issue, the insurers strongly argued to justify their stand about in validity of the driving licence and contended that the driving licence issued in favour of the driver was enforced with Professional, light motor vehicle'' and those are not in conformity with the provisions of Motor Vehicles Act, 1988 and Motor Vehicles Rules, 1989 framed there under: The copy of the driving licence annexed with the objection filed by the insurers being the duplicate issue of the original one, reveals that the original driving licence bearing No. 7779/89 issued, was valid from 29.6.89 to 28.6.91 with due endorsement light motor vehicle and ''professional'' which, according to new Motor Vehicles Act and Rules framed there under requires to be more categorical as per Form No. 6 under Rule 16(1). Learned Advocate on behalf of insurer asserts that since the Driving Licence did not incorporate the categorical information as per new Motor Vehicles Act, 1988, as such, the driving licence was invalid and not in accordance with the new Motor Vehicles Act and Rules framed there under.

THE learned Advocate for the complainant submitted that the driving licence in question, was issued prior to the implementation of Motor Vehicles Rules, 1989. He further submitted that as per Sub-section (2) of Section 1 of the Central Motor Vehicles Rules, 1989 (hereinafter referred to as 1989 Rules) came into force on the 1st day of July, 1989. He also submitted that the provision of Sub-section (1) Section 16 of 1989 Rules, provides that every driving licence issued or renewed by the licencing authority shall be in Form-6. As the duplicate copy of said driving licence, which was issued in lieu of the original driving licence, being burnt in the incidence, were neither a fresh one, nor renewed of the questioned driving licence at that material time. So, before renewal of the driving licence, there was no scope for categorical endorsement as required under Form (6) of 1989 Rules. It was further submitted on behalf of the complainant that as the driving licence was issued as per Motor Vehicles Act, 1939, hereinafter referred to as 1939 Act, it was quite in conformity with the said 1939 Act. He also submitted that the Subsection (1) of Section 3 of 1939 Act clearly outlines the procedure for grant of driving licence and also makes a distinction between the professional and private drivers as per Section 8 of 1939 Act. It appears that every driving licence, except the driving licence under Section 14 shall be in Form-D as setforth in the first schedule of the Act and shall have affixed that one of the signatures or thumb impressions given in the form of application in the driving licence and in the case of a driving licence to drive as paid employee or to drive a transport vehicle, one of the photographs referred to in Sub-section (4) of Section 7 to be affixed. THE form-D of the first schedule of the old Act categorically prescribes:- "is licenced to drive through out India, vehicle of the following description":- (a) Motor Cycle (b) Invalid carriages (c) Old motor vehicle (d) Medium motor vehicle (e) Heavy motor vehicle (f) Road rollers (g) Motor vehicle hereunder described. He is also authorised to drive as a paid employee (transport vehicle). This licence is valid from to (to be struck out if inapplicable) (Signature and designation of the licencing authority)"

THE learned Advocate of the complainant submitted that the driving licence issued as per 1939 Act was legally valid and in confirmity with the provisions of 1939 Act. THE duplicate issue of the driving licence in form No. 6 after destruction of the original one on 26.3.91 by fire was due to non-availability of form-D in the office of the Transport Authority and as it was a replica of the original one, there was no scope to change the endorsement what was in the original except at the time of renewal of the driving licence after expiry of the licence on 28.6.92.

IT was further contended by the learned Advocate of the complainant that 1939 Act prescribes the unladen weight of light motor vehicle as 3000 kg. for which the driving licence was granted to the driving of the captioned trekker whereas, the weight of captioned trekker is not more than 1000 kg. and the same is averred in the petition of rejoinder supported by affidavit. IT was also contended by the learned Advocate of the complainant that his client is in better footing in view that Motor Vehicles Act 1988 prescribes the unladen weight of any of the light motor vehicle which does not exceed 6000 kgs. He also added that the trekker of his client can be categorised as maxi-cab or transport vehicle or minibus of contract carriage within the weight range of light motor vehicle. Accordingly, the driving licence of the driver of the captioned trekker was valid and in confirmity with the provisions of the old as well as new Motor Vehicles Act. Issues Nos. 4, 5 & 6 The issues Nos. 4, 5 & 6 are taken-up together for the sake of convenience.

It was submitted on behalf of the insurers that final report of the surveyor recommended only 30% loss of total insured value covered by the Insurance Policy and the compensation for the captioned Trekker can not be given more than the recommendation made by the final surveyor. On the other hand the insured/complainant placed reliance upon the report dt. 15.4.91 of the Spot Surveyor Mr. D.M. Khemka appointed by the insurers, the report dt. 24.4.91 by M.V. Inspector/Begusarai and the police report dt. 2.8.91 all annexed with the petition of rejoinder by the complainant wherein, all the authorities reported about total loss of the captioned trekker is beyond repairable condition. The learned Advocate of the complainant pointed out many irregularities in the report of the final surveyor and attributed to the said report as manufactured fabricated and procured one for the purpose of dislodging and disowning the claim of the complainant.

WE also find that the report of the final surveyor is not based upon concrete platform in as much as that no notice of inspection of the Trekker was given to the complainant or to the Police Station in whose custody the Trekker was laid upto 25.5.91 at the period of survey carried out during 14.5.91 to 16.5.91. Further, it is noticed that the alleged inspection of the Trekker by the final surveyor was carried out at Begusarai New Bus Terminus, but sometime it is said Begusarai Bus Terminus, although at that material period the Trekker was still lying at the ditch by the side of National High Way under police custody. Further, it was alleged in the final report that the insured was directed to place the Trekker in any repairing of loss, but it was not complied by the insured and the final surveyors reported the matter to the concerned officials of the insurers to direct the insured to place the vehicle in a well-equipped workshop, but no fruitful result had come out, as reported by the said final surveyor. But from the documents on records, we find that one letter dt. 23.10.91 written by the insurers to the complainant to tow the Trekker from Begusarai to Calcutta at the expense of Rs. 1000/- as per policy condition, but the insured complainant vide his letter dt. 14.11.91 (Annexure)" to the re-joinder petition) informed the insurers that minimum charge of Rs. 15,000/- shall be required to tow the Trekker from Begusarai to Calcutta by Trekker Truck in order to place the Trekker in the Repairing Shop of M/s. B.K. Motors/Calcutta and regretted his inability to tow the same from Begusarai to Calcutta for Rs. 1000/- but as it appears that the said letter dt. 14.11.91 of the complainant remained un-replied by the insurers nor they arranged to tow the Trekker from Begusarai to Calcutta by themselves which was their primary responsibility. On the other hand, the said M /s. B.K. Motors, an expert in repairing job, upon proper examination of the Trekker submitted its estimate bearing No. BKM/132/ 91/92 dt. 9.87.91 for Rs. 1,22,713.00 as per Annexure K'' to the petition of rejoinder and the same cannot be disbelieved in the facts and circumstances of the case. Further M/s. B.K. Motors has also observed that any other parts found necessary after dismantling, would be charged extra. It is also surprising to us that photographs submitted by the insurers snapped by both the surveyors appointed by them gives different pictures. The photographs of Spot Surveyor show the bare damaged skeleton of the trekker without tyres on the rim, whereas the photogrpahs taken by the final surveyor shows the complete set of tyre, tubes, rim etc. fitted with trekker. It is also surprising to us, that as per final report, without dismantling the trekker after placing it in a repairing workshop, the correct assessment of loss on the superficial inspection of the trekker is not possible but still the said surveyor assessed loss to the tune of 30% out of the insured value to perform their duty on the basis of said superficial inspection. Hence we can not accept the final report, as authentic, and reject it, especially, in view of the three concurrent reports submitted by 3 different authorities including the Spot Surveyor about total loss of the trekker. It was also contended on behalf of the complainant that after examining of the reports and the documents produced by the insured, the insurers ought to have settled the claim as submitted by the insured within the reasonable time of 3/4 weeks from the date of submission of the claim, but due to failure and negligence to settle the claim of the complainant within 3/4 weeks by the insurers, they are guilty of inordinate delay and negligence and are liable to pay not only the interest of the claimed amounts, but also liable to pay market value due to total loss of the trekker. It was also argued on behalf of the complainant that due to serious negligence on the part of the insurers to settle the claim of the insured, the complainant is entitled to interest, expenses incurred for boarding, lodging and travelling etc. on account of harassment for frequent movements from Begusarai Bihar to Calcutta. In support of his contention, the Id. Advocate on behalf of the complainant relied upon certain decisions reported in 1992. (1) CPR 334,1992 (1) CPR 431,1992(1) CPR 439, 1992(1) CPR 575 and 1992(1) CPR 809 all passed by the National Commission.

ON going through the decisions in the case of Rajkamal v. United India Insurance Co, Ltd. and Others reported in 1992 (1) CPR 334, we find that before repudiating the claim of the insured on the basis of surveyor''s report it is for the Insurance Co. to examine the documents produced by the insured before it and then come to an independent conclusion, if the claims of the insured were inflated or not, applying its own mind. Merely because the insurers has repudiated the Insurance Claims under the Policy on the basis of the report of the surveyor, it does not oust the jurisdiction of the Consumer Redressal Forum to entertain the case. The ratio of decision in the case of Oriental Insurance Co. Ltd. v. Suresh Arjun Karandp reported in 1992 (1) CPR 431 is that while settling the claim based on Motor Insurance Policy, the Insurance Co. is liable to pay to the insured in the event of total loss, the market value of the vehicle on the date of its total loss and not the actual amount stated in the policy, as the value of the vehicle estimated by the insured. Accordingly, the insured is entitled to the estimated cost of repairing as quoted by M/s. B.K. Motor. Further, following the ratio in the case cited above and in the case of Col. Vim Singh v. Regional Manager/National Insurance Co. Ltd. and Anr. reported in 1992 (1) CPR 439, we are of opinion that there has been inordinate and unjustified delay in the settlement of the claim on one ground or other in the instant case and also feel that the insured had to run unnecessary to different places and write innumerous letters for getting his claim settled expeditiously and consequently be suffered mental and physical harassment. We, therefore, hold that the insured is entitled to his claim amount of Rs. 1,22,713.20 as per estimate of repairing shop M/s. B.K. Motors Annexure "K" to the petition of rejoinder being the market value of the repairing charges and interest at the rate of 18% on claim amount after 4 weeks from the date of submission of the claim by the insured, till the date of payment of the claimed amount and the sum of Rs. 10,000/- be also paid to the complainant towards his travelling, boarding, lodging and out pocket expenses for such long period as against Rs. 1,22,713.20 claimed by him. Similarly the decision in the case of M/s. Uniplus India Ltd. v. National Insurance Co. Ltd. reported in 1992 (1) CPR 575 it has been held that Insurance Co. has reduced the amount payable under the Insurance Policy arbitrarily and has not settled the claim with reasonable expedition so it is guilty of deficiency in service towards insured and awarded full claim of Rs. 14,28,619.50 together with 18% interest after expiry of one month from the date of filing of the claim, costs of Rs. 5,000/- and other charges. To our views this case fully supports -the instant case of the complainant. In the case of S. Villinayagram and Co. v. New India Insurance Co. Ltd. reported in 1992(1) CPR 805 cited by the complainant the similar view has been upheld that the Insurance Companies must compensate the insured for settling the claim beyond reasonable period. It was further observed, in the said case, by their lordships that while safeguarding interest in respect of public funds by ensuring that no false or exaggerated claims are admitted, it is essential at the same time that the insured are compensated by way of interest on the amount paid to them late. Till the amount found due on the claim are released, the insured have to suffer financial embarrassment due to paucity of funds and to bear interest charge, if they have borrowed till their claims are settled. In equity, therefore, the Insurance Co. must compensate insured for settling claim reasonable period in view that complainant''s vehicle was taken by borrowing fund from opposite party No. 4. In the light of aforesaid discussion, and findings, we therefore order that the insurers shall pay within 30 days from the date of this order to the complainant, as under:- (1) A sum of Rs. 1,22,713.20 being the amount of claim with interest thereon at the rate of 18% per annum after expiry of 4 weeks from the date of which claim was filed with the Insurance Co. till the date of the amount is paid on the Insurance Policy. (2) A sum of Rs. 10,000/- as expenses incurred by the complainant for his travelling, boarding, lodging and out of pocket expenses for such a long period for the settlement of his claim. (3) The insurers shall also pay Rs. 1,000/- towards the cost of the complainant.

NO damages as claimed are awarded in view of awarding interest on the claim amount of Rs. 1,22,713.20. Complaint allowed with costs.