NATIONAL INSURANCE COMPANY LIMITED vs Jagir Chand

THIS revision petition has been filed against the order dated 31.03.2011 of the Punjab State Consumer Disputes Redressal Commission, Chandigarh, (in short, the State Commission). By this order, the State Commission partly allowed the appeal of the respondent/complainant and directed the petitioner insurance company to pay Rs.5,75,000/-, minus the amount already paid, within one month from the date of receipt of the order along with interest @ 7.5 % per annum only on the remaining amount, with effect from 06.06.2004 (i.e., after three months from the date of accident) till the date of payment.

THE facts are that the respondent bought a motor car for Rs.6,06,644/- on 02.03.2004 and got it insured for Rs.5,76,217/- (Insureds Declared Value IDV)with the petitioner insurance company for the period 02.03.2004 to 01.03.2005. THE car met with an accident on 05.03.2004 while being driven by the respondent and both he and his wife received serious injuries. On 06.03.2004, the surveyor appointed by the insurance company inspected the vehicle and assessed the loss on total loss basis, as the car was badly damaged. After nearly 11 months from the date of the accident, the insurance company offered to settle the claim for Rs.3,64,000/-. THE respondent received the amount on 19.03.2005 under protest and filed a consumer complaint before the District Consumer Disputes Redressal Forum, Ferozepur (in short, the District Forum), alleging deficiency in service on the part of the petitioner/insurance company in that the latter failed to settle the claim on total loss basis for Rs.5,86,644/- though the car was completely damaged and had been assessed on that basis by the surveyor. Before the District Forum, the insurance company denied any deficiency in service and stated that the complainant had written to the surveyor accepting the IDV of Rs.5,15,000/- on total loss basis. THE surveyor had also estimated the salvage value of the car at Rs.1,50,000/-. Deducting the said salvage value and the excess clause amount of Rs.1000/- under the insurance policy, the insurance company had offered to pay Rs.3,64,000/-, based on complainants own acceptance. THE complainant denied having written to the surveyor accepting the gross amount (IDV) of Rs.5,15,000/- by way of settlement of his claim and also refused to take the damaged car for the estimated salvage value of Rs.1,50,000/-. THE District Forum, by its order dated 28.07.2005, dismissed the complaint and relegated the complainant to civil court. It was against this order that the complainant filed an appeal before the State Commission, with the result mentioned above. I have heard Mrs. Nanita Sharma, learned counsel for the petitioner. She has drawn attention to the assessment of the loss by the surveyor, which reads as under: ASSESSMENT ON TOTAL LOSS BASIS: a. IDV (correctly arrived) Rs.5,76,217/- b. Invoice value of vehicle as on date of insurance Rs.6,06,544/- c. IDV was discussed with the insured in detail who agreed for settlement of loss on total loss basis for Rs.5,15,000/- (consent enclosed) d. Salvage value of damaged vehicle is Rs.1,50,000/- with R.C. if disposed off immediately. She also drew attention to the letter allegedly written by the respondent/complainant accepting the IDV of Rs.5,15,000/-.

On the other hand, in its impugned order, the State Commission observed, inter alia, the following: 12. We have perused the acceptance letter, which was produced by the respondent but the same does not bear any date when the same was written by the appellant and when the same was handed over by the appellant to the surveyor. Even in the reply to the complaint the respondent had not mentioned that when the acceptance letter was handed over by the appellant to the surveyor vide which he had given his consent for acceptance of Rs.5,15,000/- as full and final satisfaction regarding the claim of the vehicle and also accepted the salvage of the car valued at Rs.1,50,000/-. The respondent has also not examined the surveyor nor tendered into evidence his affidavit in support of its version that the appellant had given the consent letter regarding the acceptance of the claim as per version and pleaded case of the respondent.

IT is indeed difficult to see why the complainant would agree to settle the insurance claim for his brand new car for the net amount of Rs.3,65,000/- after accepting the very badly damaged car for a salvage value of Rs.1,50,000/-. Even according to the surveyor, the IDV (correctly arrived at) was Rs. 5,76,217/-. In a situation where the complainant had specifically denied having written the alleged letter of acceptance, it was incumbent on the insurance company to prove the said letter by examining the surveyor as the material witness before the District Forum or, at least, filing an affidavit of the surveyor. None of this was done by the insurance company. As the damaged vehicle was refused by the insured, it was also open for the insurance company to retain it for the salvage value of Rs.1,50,000/-, if it found that assessment just and fair. In view of the foregoing, I am not inclined to interfere with the well-reasoned order of the State Commission under section 21 (b) of the Consumer Protection Act, 1986. The revision petition is accordingly dismissed.