National Insurance Co. Ltd. vs GURMEJ KAUR

THIS appeal is directed against the order dated 5.4.1999 passed by the State Consumer Disputes Redressal Commission, Maharashtra, in Case No. C-266/96.

THE facts leading to the controversy are that the complainant owned a Tata Truck which was insured with the National Insurance Co. Ltd., the appellant herein, for the period 20.6.1995 to 19.6.1996. THE vehicle was purchased under hire-purchase agreement with M/s. Apple Industries Ltd., Nagpur. THE vehicle met with an accident on 28.3.1996 at about 10.00 a.m. Diesel from the tank leaked out and associated with sparks, the truck caught fire and fell in the ditch. It was case of total loss. THE claimant lodged a claim of Rs. 6,52,080/- towards the total loss of the truck. THE Surveyor appointed by the Insurance Company reported about the total loss of the vehicle. Despite the report of the Surveyor, the Company did not pay the amount and it resulted in filing a complaint before the State Commission. The claim was contested on behalf of the Insurance Company on the ground that the driver of the vehicle was not holding a valid licence.

The State Commission, on the basis of the material placed before it, allowed the claim for Rs. 6,52,080/-. The State Commission observed that the claim preferred by the complainant was justified and it was not settled for a long time and as such the Insurance Company will be liable to pay interest at the rate of 18% from 1.8.1996.

THE Insurance Company challenged the order of the State Commission by way of this appeal. We have heard the learned Counsel for the parties. It was contended by Mr. Vimal Wadhwani, Counsel for the Insurance Company that the State Commission wrongly observed that the Insurance Company had not taken the plea that the driver was not holding a valid licence. In the written statement, it was specifically mentioned that the driver was not holding a valid driving licence. It was further contended that the State Commission was wrong in awarding a sum of Rs. 6,52,080/-, whereas the State Commission has not given credit for the salvage of the truck which was to the tune of Rs. 75,000/-. Another point that was taken by the learned Counsel for the appellant was that the State Commission went wrong in awarding interest at the rate of 18% p.a. which is contrary to the law laid down by the Supreme Court in the case of M/s. United India Insurance Co. Ltd. v. M.J.K. Corporation, reported as III (1996) CPJ 8 (SC)=(1997) CTJ 648. On the other hand, the respondent supported the judgment of the State Commission.

WE have given our thoughtful consideration to the entire matter. No doubt, the State Commission observed that no plea that the driver was not having a valid licence was raised by the Insurance Company in its written statement. WE have perused the written statement. The plea was taken. However, on the question of holding a valid licence by the driver, the State Commission observed in the following terms : "On the question of licence of the driver, which is produced on record, the licence issued by the RTC Nagpur clearly shows that Mr. Sharma was holding licence on the date of accident viz. 28.3.1996. The affidavit of Mr. Sarbjitsingh Dhingra would pale into insignificance because the original licence is produced and that the same is issued by RTC, Nagpur."

The State Commission decided the question whether the driver was holding a valid licence or not. The State Commission recorded the finding after considering the relevant records. WE find no legal infirmity with the finding recorded by the State Commission. WE have perused the report of the Surveyor. It was a case of total loss of the truck. The complainant claimed Rs. 6,52,080/- for the price of the new chassis. The Surveyor in his report assessed the value of the burnt vehicle at Rs. 75,000/-. As the salvage remained with the complainant, the amount of Rs. 75,000/- was to be deducted from the amount of Rs. 6,52,080/- . Thus, after adjusting the amount of Rs. 75,000/-, the complainant is entitled to recover a sum of Rs. 6,52,080/- minus Rs. 75,000/- i.e. Rs. 5,77,080/-. The order of the State Commission is modified to this extent. In view of the judgment of the Supreme Court in the case M/s. United India Insurance Co. Ltd. v. M.J.K. Corporation (supra), the Insurance Company will be liable to pay interest at the rate of 12%. The State Commission has awarded interest at the rate of 18% p.a. which is not in conformity with the judgment of the Supreme Court. In view of the above, we hold that the complainant is entitled to interest at the rate of 12%. p.a. and the order of the State Commission is modified accordingly. The appeal is partly allowed, in the above terms. However, the parties are left to bear their own costs. Appeal partly allowed.