MAHESH JAIDEV NAIK vs National Insurance Co. Ltd.

THIS complaint has been filed for a direction to the opposite party to pay a sum of Rs. 6,45,000/- towards the total loss of Tata Tipper Truck of Model 1996 bearing Engine No. 101915 and Chassis No. 101493, Registration No. GA- 02-T-8157 with interest thereon @ 21% and also compensation.

THE case put forward by the complainant in brief is as follows : On 18.1.1996, the complainant booked a Tata Tipper Truck with its dealer and advanced a sum of Rs. 6,44,713 / -. The amount for purchase of truck, has been financed by Corporation Bank, Dhargal. On 27.2.1996, the dealer made available the Tata Tipper Truck of Model 1996, bearing Engine No. 101915 and Chassis No. 101493. On 28.2.1996, he insured the same truck with the opposite party for a sum of Rs. 6,45,000/- under a comprehensive insurance policy for the period from 28.2.1996 to 27.2.1997 on payment of premium of Rs. 13,606/-. The vehicle was later registered under No. GA-02-T-8157. On 1.8.1996, this vehicle met with an accident and was completely damaged resulting in total loss and complainant immediately reported the same to the opposite party. The Surveyor of the opposite party conducted the survey of the said damaged vehicle and declared it to be a case of total loss. On 20.8.1996 the complainant lodged claim for a total loss of said vehicle in the sum of Rs. 6,45,000/-. The opposite party agreed to settle the claim for a sum of Rs. 6,30,000/- within 30 days and later did not settle the claim. Therefore, the complainant has pleaded that he is entitled a sum of Rs. 6,45,000/- towards the total loss of vehicle alongwith 21% interest from 1.11.1996 till payment. He has also sought for compensation of Rs. 3,00,000/- towards loss of earnings.

The notice of institution of this complaint was served on the opposite party on 10.10.1997. The written version of the opposite party was filed before this Commission on 28.11.1997 i.e. clearly beyond 45 days as prescribed in section of Consumer Protection Act, 1986.

BOTH the parties filed their affidavits in evidence and some documents. It was contended by the learned Advocate for the complainant that the written version of the opposite party shall not be taken note of by this Commission as it has been filed beyond the prescribed period as referred to above. When it has been filed after the expiry of 45 days, we think the learned Advocate is right in contending that it was not within the prescribed period and this Commission should not take note of it.

IT may be noticed that there is affidavit of Senior Divisional Manager of the opposite party swearing to the same as the written version. That the vehicle has to be considered as total loss, has not been disputed. Though the complainant has claimed a sum of Rs. 6,45,000/- towards loss of vehicle, the learned Advocate for the complainant submitted that the market value of the vehicle as on date of the accident as assessed by the opposite party of Rs. 6,25,000/- may be accepted by this Commission. The only other aspect for disputing the liability of the opposite party, that has been brought to our notice by the learned Advocate is that in respect of policy, an amount of premium payable as per the tariff rates, was Rs. 13,265/- and the amount paid was only Rs. 13,264/- and therefore, the policy issued is not a valid policy and, therefore, the liability is not cast on the opposite party. It may be noticed that no material has been placed to show as on date of issue of policy, the premium that ought to have been paid was Rs. 13,265/-. Even if we accept the correctness of that figure, it is to be seen whether the liability can be repudiated on that ground.

THE learned Advocate for the complainant invited our attention to the decision of the Supreme Court in Oriental Insurance Co. Ltd., v. Inderjit Kaur & Ors., reported in I (1998) ACC 1 (SC)=1997 (9) 760, Judgment today, dealing with liability of insurer to third party. In this case, the cheque had been received towards insurance of policy and policy had been issued. Later the cheque bounced, after adverting to Section 147(5) and Section 149(1) of Motor Vehicles Act, the Supreme Court held that the Insurance Company was liable despite it having not received the amount towards premium on bouncing of the cheque.

SECTION 147(5) of the said Act reads as under: "Notwithstanding anything contained in any law for the time being in force, an insurer issuing a policy of insurance under this section shall be liable to indemnify the person or classes of persons specified in the policy in respect of any liability which the policy purports to cover in the case of that person or those classes of persons."

Therefore, this section read in the background of the decision of Supreme Court makes it clear once the policy is issued irrespective of whether the cheque bounced or it did not receive the entire amount in respect of premium, it is liable to answer the liability covered under the policy and liability under policy cannot be repudiated even if the cheque issued is bounced. If that is so, it is clear that there is no scope to the opposite party to repudiate its liability on the ground premium recovered is less by one rupee.

It may not be necessary for us to go into the other aspects as to who is responsible for recovery of rupee one less than the tariff rate. As rightly pointed out on behalf of the complainant, he would not be in a position to say what exactly is the rate prescribed. Necessarily the authorised representative of Insurance Company should collect the correct tariff rate. It is nobodies case that on account of any fraud practied that the amount was recovered by one rupee less. When that is so, the opposite party is barred from urging such contention to repudiate the policy. Therefore, there is no substance in the contention put forward by the opposite party that the premium is less than the tariff rate and therefore the opposite party is not liable to answer the claim of the complainant.

THE claim was lodged on 20.8.1996 and the opposite party should have some reasonable time to process the papers and after expiry of 3 months period, there does not appear to be any justification, whatever for the opposite party not to have paid the amount covered by the policy. THErefore, we are satisfied that the complainant is entitled to recover interest on Rs. 6,25,000/- from 20.11.1996, till the date of payment. So far as the rate of interest is concerned, it was pointed out by the learned Advocate for the appellant it should be granted @ 21% on the ground Banks charge at that rate. In all cases coming under the Consumer Protection interest is awarded @ 18% per annum and we find that no scope to depart from the said practice. Therefore, the complainant is entitled to recover the amount from the opposite party byway of interest @ 18% per annum on a sum of Rs. 6,25,000/- from 20.11.1996.

THE complainant has put forward his claim for compensation on other grounds. It does not fall under the Consumer Protection Act. THErefore, the claim in that regard is negatived. In the result, we direct the respondent to pay to the complainant a sum of Rs. 6,25,000/- with interest thereon @ 18% from 20.11.1996 till the date of recovery. The complainant is also entitled to cost of this proceeding. We quantify the cost at Rs. 5,000/-. As the vehicle has been financed by Corporation Bank, Dhargal on hire purchase, the learned Advocate for complainant stated that he has no objection for the entire amount payable to his client be sent to Corporation Bank, Dhargal, it shall be sent accordingly. The salvage of the truck which is in custody of the complainant shall be handed over to the opposite party within two weeks from this date on as and where is basis. Complaint disposed of with costs.