NATIONAL INSURANCE CO LTD vs DINESH

IT is the insurer -opposite party, which is aggrieved by the order of the Maharashtra State Consumer Disputes Redressal Commission, has filed this appeal. Earlier this appeal was dismissed by this Commission holding that it had gone through the records of the case and was disinclined to interfere with the order passed by the State Commission. No reason was given as to why this Commission did not find it necessary not to interfere with the order of the State Commission. The matter was then taken by the insurer to the Supreme Court which by order dated 12.1.2001 set aside the order of this Commission and remanded the appeal for fresh disposal after giving opportunity of hearing to the parties and by passing reasonable order in accordance with law. That is how this appeal is again before us.

THERE was an insurance claim by the respondent -complainant for loss of its insured vehicle. The vehicle was a tanker which was insured with the petitioner for Rs. 5,90,000/ -. During subsistence of the insurance policy, the vehicle met with an accident. It overturned and the petrol which it was carrying started leaking. During the process of transferring the petrol to another tanker on 29.12.1995, with the help of a generator pump, the insured vehicle got fire from the sparks resulting into damage to it. Respondent claimed insurance for total loss. Appellant had alleged that it carried out spot survey on 31.12.1995 and final survey in February, 1996. Surveyor submitted his report on 8.5.1996. He assessed loss on three basis namely : 1. Repair basis assessment of loss : Rs. 5,70,159/ - 2. Cash loss basis assessment : Rs. 4,48,233/ - 3. Total loss basis assessment : Rs. 4,30,000/ - to Rs. 5,00,000/ - and collect the salvage

IT is then alleged that Surveyor opined that claim might be settled on net loss basis at Rs. 4,15,000/ - in full and final settlement of the claim. It is then alleged that the respondent did not submit the required documents until 11.3.1997. However, before the claim could be assessed finally, respondent filed complaint before the State Commission alleging deficiency in service and claiming an amount of Rs. 18.66 lakhs towards damages. Insurer says that it approved the claim for Rs. 4,13,500/ - on net loss basis. It did not fully agree with the report of the Surveyor and it was not bound to do so under proviso to Sub -section (2) of Section 64 UM of the Insurance Act, 1938. State Commission treated the case of the complainant as a total loss of the insured vehicle and referred to the report of the Surveyor in which total loss was stated to be Rs. 5,40,000/ - (less the excess charges under the policy Rs. 1,500/ -). It was noted that while the insurer offered the settlement on net loss basis, complainant wanted the same on total loss basis and to hand over the salvage to the insurer. Considering the facts and circumstances of the case State Commission directed the appellant -insurer to pay to the claimant a sum of Rs. 5,38,500/ - with interest @ 12% per annum w.e.f. 1.4.1996 till payment. It was mentioned that interest was being allowed on account of inordinate delay on the part of the insurer in settling the claim. Direction was given to the complainant to hand over the salvage to the insurer. There was a further direction to the insurer to pay Rs. 1,500/ - per month as garage rent to the complainant from the date of accident till insurer took charge of the salvage. Insurer was to collect salvage at its own cost on as is where is basis. No amount was awarded towards mental tension and consequential losses. Complainant was however allowed cost of Rs. 5,000/ -.

FROM the order of the State Commission it is difficult to find out as to what was basis on which it held that it was a case of total loss and further that insurer should pay the charges @ Rs. 1,500/ - per month. We are considerably handicapped in considering the appeal on merit in the absence of any discussion in the impugned order. No doubt there is deficiency in service inasmuch as there is inordinate delay in settling the claim of the respondent -complainant. We remand the matter to State Commission to decide the questions afresh if insured is entitled to insurance claim on total loss basis or net loss basis and how and why the insurer is liable to pay charges @ Rs. 1,500/ - per month. In any case when the insurer is ready to pay at the net loss basis there is no reason why this money should be withheld. This amount of Rs. 4,13,500/ - with interest @ 12% per annum (from 1.4.1996 till payment if not already paid) should be paid immediately within two months. If the State Commission decides on the basis of pleadings and evidence that it is a case of total loss then the balance amount shall be payable with interest and if that order is upheld by this Commission on appeal, if any filed by the both or any of the parties.

ACCORDINGLY , we set aside the order of the State Commission to the extent aforementioned and remand the appeal to the State Commission for fresh decision on the two issues mentioned above. Considering that the accident occurred in December, 1996, we hope State Commission will be able to decide the complaint at an early date. Insurer to comply with the directions aforesaid, in the meanwhile. Ordered accordingly.