New India Assurance Co. Ltd. vs ASHOK KUMAR

THIS is an appeal against the order dated 19.4.2005 passed by the District Forum, Almora whereby the complaint of the complainant was allowed for a sum of Rs. 2,30,000 along with interest @ 9% from 28.3.2003, i.e., the date of repudiation of claim till the date of actual payment. The appellant was further directed to pay a compensation of Rs. 10,000 and costs of litigation of Rs. 1,000. The complainant was directed not to return the salvage to the Insurance Company. It was further directed that if the amount is not paid within a month, the Insurance Company shall pay interest @ 12% on the total amount from 4.11.2003 till the date of payment.

THE brief facts of the case are that the complainant purchased a Marshal Jeep No. UP01/5818 on 22.5.2000 after taking a loan from Almora Urban Co-operative Bank Ltd. It was insured for a sum of Rs. 4,06,000 with the opposite party for the period from 22.5.2001 to 21.5.2002. It is alleged that on 18.4.2002 the vehicle while coming to Almora from Bareilly met with an accident and the vehicle was totally damaged and it was not repairable. Information was given to the Insurance Company. THE claim was lodged with the Insurance Company for the whole insured amount as a case of total loss. THE Insurance Company appointed Surveyor and Investigator but did not pay the claim and at last on 28.3.2003 repudiated the claim on the ground that investigation is to be done. THEreafter the complainant filed the complaint before the learned Forum. Before the learned Forum, the Insurance Company filed written statement and admitted the insurance and accident. It is alleged that at the time of accident the vehicle was being driven against the terms of insurance. The vehicle was being used as a goods carrier, therefore, the claim was repudiated.

The parties filed their affidavits and other relevant documents in support of their allegations. The learned Forum after taking the evidence of the parties and hearing them, passed the above order, against which the present appeal has been preferred by the Insurance Company.

WE have heard the learned Counsel for the parties and gone through the records. The only dispute in the present case is whether at the time of accident the vehicle was being driven against the terms and conditions of the policy? The learned Counsel for the appellant filed written arguments. In para 2, it is alleged that the Insurance Company had repudiated the claim on the ground of breach of terms and conditions of the policy based on the reports of spot Surveyor and final Surveyor, Investigator''s report and other documents wherein it was observed that the vehicle was loaded with 12 baskets of Khoya, bundles of Dainik Jagran newspaper (estimated weight 3.60 quintals of Khoya plus weight of newspapers) besides 7 passengers were sitting in the vehicle at the time of accident, whereas the registration certificate and insurance policy of the vehicle was for passenger carrying vehicle (taxi purpose not for goods carrying). It was further alleged that the complainant should return the salvage to the company and also transfer the vehicle in the name of the company. At page 2 of the written arguments, it is said that the District Forum has wrongly allowed the claim of the complainant on market value of the vehicle. As per the survey report the claim was assessed at Rs. 89,000 after deducting the salvage of the vehicle. The cost of the salvage is Rs. 1,40,000 and the District Forum awarded the amount of Rs. 2,30,000. In this connection, the learned Counsel for the Insurance Company referred a case decided by this Commission reported in 2004 (1) UC 607, in which it was held that the Insurance Company is bound by the report of its Surveyor. It was further held in that case that in case of total loss, the complainant should return the salvage to the Insurance Company and transfer the vehicle in the name of the Insurance Company. It is further alleged that if the interest is awarded, the damages will not be awarded. In this regard the learned Counsel for the Insurance Company referred a case decided by this Commission reported in 2004 (2) UC 870, M/s. National Electricals v. National Insurance Co. Ltd., in which it was held that when interest is awarded, compensation cannot be given. In the said case, the rulings reported in II (2000) CPJ 1 (SC)=IV (2000) SLT 654, Ghaziabad Development Authority v. Union of India; III (2002) CPJ Page 124 (NC), Satelec Power Electronics v. NRDC; and IV (2003) CPJ 90=2003 (6) CLD SCDRC, Delhi page 210, Rajpal Mahana v. National Insurance Co. Ltd., were also referred, in which the same law has been propounded. It is said that the learned Forum has wrongly awarded 9% interest and has wrongly passed the order that after one month, it should be 12% if the company fails to comply the award. It is said that there is no deficiency in the services of the Insurance Company and the Insurance Company repudiated the claim after proper investigation. The learned Counsel for the respondent/complainant also filed written arguments. In para 1 of the written arguments, it is said that the learned Forum had rightly awarded Rs. 2,30,000 towards total loss of the vehicle. At page 2, it is stated that the learned Forum had given a clear and detailed findings. However instead of awarding the sum of Rs. 4,06,000 had awarded a sum of Rs. 2,30,000 only. The complainant/respondent considering his fate for the said sums had not preferred an appeal. He challenged the contention of the Insurance Company that as per Surveyor''s report, the respondent is entitled to Rs. 89,000, after deducting the salvage value. He further challenged the contention of the Insurance Company that the vehicle was overloaded and said that the Insurance Company had failed to establish as to how, the vehicle was overloaded or the person sitting in it were excessive in number or the seven persons cannot carry 12 baskets or bags. It is said that the award of 9% is very nominal one and since the appellant had failed to obey the orders of the learned Forum, the award of interest @ 12% is perfectly correct and is in consonance with the orders of Apex Court.

THE receipt of purchase of the vehicle is filed which is dated 22.5.2000 and it is for a sum of Rs. 4,06,054.88. THE cover note has also been filed in which the licensed carrying capacity is mentioned as 11 in all. THE vehicle has been insured for Rs. 4,06,000. THE copy of General Diary is also filed which was filed by Sh. Darshan Kumar Tripathi, in which the accident has been mentioned. THEn there is Technical Investigation Report of Sh. Ramayan Prasad, Senior Foreman, U.P. State Roadways Transport Corporation. THE repudiation letter dated 28.3.2003 is available on record, in which it is written, "on going through the spot Surveyor''s report, final Surveyor''s report, Investigator''s report and other documents, we observed that the vehicle was loaded with 12 packets of Khoya and bundles of Dainik Jagran newspaper (estimated weight 3.60 quintals of Khoya plus weight of newspaper) besides 7 passengers at the time of accident of the vehicle, whereas the registration certificate and insurance policy of the vehicle was for passenger carrying vehicle only (taxi purposes) not for goods carrying. Keeping in view of above it is obviously clear that this is a breach of terms and conditions of the insurance policy, and the claim is not tenable. Under the circumstances, competent authority has repudiated the said claim. Accordingly, we are closing the matter as ''No claim'' which please note." THE letter has been signed by the Branch Manager. THE licence of the driver and the permit of the vehicle have also been filed. In the permit, the sitting capacity of the vehicle is mentioned as only 10 including driver. It is further mentioned in the permit that the vehicle is a big taxi. THE temporary registration certificate has been filed and in Point No. 10, it is written that seating capacity is 9+1 in all including driver. THE additional tax payment certificate has been filed, in which the seating capacity is written as 10 in all. THE fitness certificate of the vehicle is also available on record. THEn there is affidavit of the complainant dated 29.3.2004 and again affidavit dated 9.9.2004, in which he supported the allegations of his complaint. THE estimate of hills denting and painting works, Haldwani has been filed which is for a sum of Rs. 2,46,500. The main argument of the Insurance Company/appellant is that according to investigation report and other documents, the vehicle was overloaded at the time of accident which is breach of the terms of the policy and, therefore, the claim was repudiated. The complainant in para 5 of his complaint has specifically alleged that the accident took place due to dark fog. The investigation report of Sh. Chandrapal Singh Tomar dated 31.8.2002 is available on record, in which the accident has been described and it is written that the vehicle was carrying 12 baskets of Khoya, Dainik Jagran newspaper besides passengers. It is stated that the report of accident was lodged by Sh. Darshan Kumar Tripathi. At page 2 of his report, he has mentioned that he enquired from Sh. S.P. Singh, Investigator of Police about the accident who told that he has investigated the matter and found that there were 7 passengers travelling in the vehicle at the time of accident including the driver, out of whom 1 died at the spot who was unknown and for whom Panchnama was filled in. It is further said that Sh. Vijay Kumar Sharma, Sh. Bhupesh Kothari and Smt. Hansi were injured in the said accident and other persons did not suffer major injuries. It is said that except passengers, the vehicle was loaded with Khoya and Dainik Jagran newspaper. We have already quoted the repudiation letter above in which the same thing has been mentioned. Sh. Chandrapal Singh Tomar at page 1 of his report has nowhere mentioned about the weight of Khoya and newspapers but in his conclusion he has stated that there were 12 baskets of Khoya and newspapers weighing 3.60 quintals. How he assessed the weight of the Khoya and newspapers and from which instrument and on what basis he has measured the weight of these articles, has nowhere been defined in his report. The vehicle was admitted carrying 7 passengers. The passengers must be carrying some goods/articles with themselves. The driver cannot ask the passenger not to carry their goods/articles while travelling. The learned Counsel for the respondent/complainant in his written arguments has specifically alleged at page 3 that the appellant had failed to establish as to how the vehicle was overloaded or the person sitting in it were excessive in number or the 7 passengers cannot carry 12 baskets or bags. This argument has nowhere been replied by the Insurance Company either in their written statement or anywhere else. 7 passengers were sitting in the vehicle, whereas the vehicle was entitled to carry 10 passengers, i.e., there were 3 passengers short of prescribed limit. Even otherwise the complainant has specifically alleged in his complaint as said above that the said accident took place on account of dark fog. There was no sitting of extra passengers and if overloading is taken to be correct, it has got no nexus with the accident. Thus the report of Investigator Sh. Chandrapal Singh Tomar is of no help to the Insurance Company to repudiate the claim. Even otherwise Khoya and newspaper bundles are never carried by truck. These are ordinarily carried along with passengers. Then there is final survey report of Sh. Vinod Kumar Sanguri dated 21.6.2002. In his report he has assessed the salvage value of the vehicle at Rs. 1,40,000 and has calculated the net liability of the company as Rs. 89,000. He has recommended that the settlement on total loss basis is most economic for the insurers. Thus he has admitted that there was total loss of the vehicle and the assessment on repair basis is likely to go up. He has stated that the present market value of the vehicle, its value just prior to loss i.e., on 18.4.2002 is considered after consultations with auto dealers dealing in used vehicle and is considered for Rs. 2,30,000. The learned Forum has also allowed a sum of Rs. 2,30,000. Thus it cannot be said that the learned Forum has allowed excessive amount.

THE learned Counsel for the Insurance Company referred a case decided by this Commission reported in II (2005) CPJ 646=2005 (1) UC 497, United India Insurance Co. Ltd. v. Smt. Ameena Begum. In this ruling no fitness certificate was produced by the complainant. In this present case the complainant has filed the fitness certificate of the vehicle. This ruling shall not apply to the facts of the present case. THE learned Counsel for the appellant further referred the ruling of the Hon''ble National Commission reported in II (2005) CPJ 10 (NC), Vatorgard Chemicals Private Limited v. National Insurance Co. Ltd., in which it was held that the Surveyor''s report is an important piece of document and can be challenged on basis of documentary or any specific evidence. In the present case the learned Forum has allowed claim on the basis of market value of the vehicle, which is reported by the Surveyor as Rs. 2,30,000. Thus it cannot be said that the learned Forum has allowed higher amount. THE same is the position with the ruling reported in II (2004) CPJ 1 (NC), National Insurance Co. Ltd. v. Winner Chorates (P) Ltd.

THE learned Forum has allowed the claim amount of Rs. 2,30,000, which is just and proper and need not interfered with. THE learned Forum has further allowed compensation of Rs. 10,000. It is settled principle of law as stated in the ruling quoted above that interest and compensation cannot be awarded together. Thus the order of payment of compensation is not at all correct and is liable to be quashed. THE learned Forum has further ordered that in case the amount is not paid within one month, the appellant shall pay interest @ 12%. THEre is no question of punitive interest. THErefore, that order is also not correct. THE complainant shall get flat interest @ 9% from the date of repudiation, i.e., 28.3.2003 till the date of actual payment. Since this is a case of total loss, thus the salvage is to be returned to the Insurance Company and the vehicle is to be transferred in the name of the Insurance Company. THE order under appeal is to be modified accordingly. ORDER THE appeal is hereby partly allowed and partly dismissed. THE order of payment of compensation of Rs. 10,000 and payment of interest @ 12% is hereby quashed. THE complainant shall get interest @ 9% from 28.3.2003 till the actual date of payment. THE complainant shall return the salvage to the Insurance Company and transfer the vehicle in the name of the Insurance Company. Rest part of the order passed by the learned Forum is hereby confirmed. Costs of this appeal shall be easy. Appeal partly allowed.