New India Assurance Co. Ltd. vs CENTRE (CERC)

MR. Justice M.S. Parikh, President-This appeal arises from ex parte order dated 13th November, 2003 rendered by the learned Ahmedabad City Consumer Disputes Redressal Forum in Complaint No. 322/2003. Impugned order reads as under: "The complaint is partly allowed. (a) The opponents are hereby directed to pay Rs. 3,37,349/- with interest at the rate of 10% per annum from the date of repudiation 6.12.1988 till the actual payment. (b) Further, the opponents are hereby directed to pay to the complainant Rs. 2,000/- as cost and Rs. 2,000/- as compensation of mental agony and harassment suffered by the complainant. (c) The opponents are further directed to pay to the complainant Rs. 5,000/- as cost to the opponent No. 1. (d) The opposite party is hereby directed to comply with this order within 30 days from the date of receipt of copy of this order."

WE have heard the learned Advocates for the parties. WE have gone through the impugned order. WE have gone through the grounds taken in the memorandum of appeal. It was the complainant''s case that while going on a piligrimage with his family members in the insured car in question and while passing through Satna area at around 1.30. p.m. complainant No. 2 was attacked by robbers. Complainant No. 2''s personal belongings including cash, jewellary and other belongings as also the car with original papers were stolen in the incident. Complainant No. 2 lodged claim before the local police at Satna. The incident was reported in local newspaper on 7.12.1998. Complainant No. 2 also informed the office of the opponents at Satna on 7.12.1998 itself. He waited for settlement of the claim, but without any response from the opponent Insurance Company. The complainant received letter dated 15.2.1999 from the office of the opponent at Satna that his stolen car was recovered by the Police at Kothi, Satna. The complainant gave power of attorney to one Mr. Nimesh Bajaj residing at Kothi to take possession of the car through the police and Court since the vehicle was attached as a Mudamal by the police. Mr. Vinod Shukla, relative of the complainant No. 2 took possession of the car on 14.7.2000 on signing a bond for Rs. 5.00 lakhs. Preliminary survey was made by the opponent Insurance Company at Satna. Complainant No. 2 was advised to take the car to the authorised repair shop at Mumbai. The car was taken to Aden Auto Centre at Goregaon, Mumbai on 29.7.2000. Complainant No. 2 received estimate of repairs from the said garage on 1.8.2000 and the same was sent to the opponent Insurance Company. Complainant No. 2 also sent a statement of expenses for retrieval of the vehicle on 27.1.2001 and that was in the sum of Rs. 74,349/-. Thereafter as many as six Surveyors were appointed by the opponents one after the other and delayed the matter with regard to the finalization of the claim. Complainant No. 2 was thereafter advised for removal of the vehicle from Auto Centre on 2.3.2001 that is after more than 15 months of the incident. The Surveyor treated the vehicle on total loss basis. Complainant No. 2 once again communicated with the opponent Insurance Company to decide the best possible salvage value. Besides, the Aden Auto Centre gave bill for Rs. 20,000/- towards parking charges for 214 days. Complainant No. 2 approached the Mumbai Office of the opponents for early settlement of the claim. However, the opponent Insurance Company offered an amount of Rs. 93,650/- in full and final settlement of the claim. As the offer was unreasonable complainant No. 2 opted not to accept the same. Complainant No. 2 obtained valuation report from licensed Surveyor M/s. B.N. Mehta and Co. who valued the salvage at Rs. 60,000/-. Yet the complainant No. 2 made efforts with the result that he could fetch salvage value in the sum of Rs. 65,000/- by selling the damaged car. Complainant No. 2 was, therefore, required to issue notice dated 2.7.2002 to the opponent Insurance Company claiming insured value of the car in the sum of Rs. 3,08,000/-, retrieval charges in the sum of Rs. 74,349/- and parking charges of Rs. 20,000/-, in all Rs. 4,02,349/- less Rs. 65,000/- received by way of salvage, leaving a balance of Rs. 3,37,349/-. The matter went ex parte before the learned Forum resulting into passing of the impugned order.

It would clearly appear from the proceedings before the learned Forum as also from the earlier proceedings that there was gross delay and default on the part of the opponent Insurance Company in not attending to the matter before the learned Forum. There was no reason for the opponent Insurance Company for not defending the matter before the learned Forum particularly when it had occasion to appear before this Commission when the complaint was filed before this Commission and the complaint was relegated to the learned Forum. In that view of the matter we do not propose to show any indulgence in favour of the opponent Insurance Company for giving it opportunity to defend the matter by remanding the same to the learned Forum.

WE have, therefore, heard the learned Advocate appearing for the opponent Insurance Company on the merits of the matter as that stand on the face of the impugned order. It is not in dispute that the insured estimated value is Rs. 3,08,000/-. It is also not in dispute that the car was purchased in the year 1996. It is finally not in dispute that the incident occurred in the year 1998. Hence in view of the decision of the Hon''ble National Commission in the case of National Insurance Co. Ltd. v. Anil Lamba, reported in I (2003) CPJ 229 (NC), depreciation @ 15% will have to be deducted from the insured estmated value. Such depreciation works out at Rs. 46,200/-, that there is a balance awardable in favour of the complainant No. 2 in the sum of Rs. 2,61,800/-.

IT has been submitted on behalf of the opponent Insurance Company that the salvage value of Rs. 65,000/- is on lower side as stated above. The complainant was supported by necessary particulars and the evidences to show that the resale of the salvage was just, proper and on account of non-pardonable delay on the part of the opponent Insurance Company and hence salvage value of Rs. 65,000/- stated by the complainant will have to be accepted. Deducting the salvage of Rs. 65,000/- from Rs. 2,61,800/- the balance amount of Rs. 1,96,800/- will have to be treated as appropriate compensation awardable to the complainant No. 2 insofar as the insured vehicle in question taken in total loss basis. It is not in dispute that the vehicle in question was placed at Aden Auto Centre (authorized repair shop) at Mumbai at the say of the opponent Insurance Company. Opponent Insurance Company did not take speedy and prompt steps for assessment of just and proper compensation on repairs basis. Therefore, there was no default on the part of complainant No. 2 in keeping the vehicle at the aforesaid garage. In fact default and delay was on the part of the opponent Insurance Company. This is a classic case where the opponent Insurance Company is guilty of gross delay in settlement of the claim. That has resulted into loss of Rs. 20,000/- towards parking charges to the complainant which cannot be disputed by the opponent Insurance Company. Thus compensation will have to be awarded to the complainant on account of deficiency in service on the part of the opponent Insurance Company and not on account of the claim which can be awarded under the terms and conditions of the policy of insurance in question. Adding that amount to the aforesaid amount it would give a figure of Rs. 2,16,800/-. It has then been submitted on behalf of the complainant that the complainant would be entitled to retrieval charges of Rs. 74,349/-. In our considered opinion such amount cannot be awarded under the terms and conditions of the policy in question. As a matter of fact the complainant No. 2 has not been able to show evidence as to how expenses in the sum of Rs. 74,349/- for retrieval of the car are required to be awarded from the opponent Insurance Company under the terms and conditions of the policy in question. It is common case of both the parties that the vehicle in question was taken in total loss basis. If that is so the complainant would be entitled to market value of the vehicle less salvage value as per the aforesaid decision of the Hon''ble National Commission. We have worked out the amount payable accordingly. Hence the claim for Rs. 74,349/- cannot be awarded.

LEARNED Forum has awarded compensation in the sum of Rs. 2,000/- on the head of mental agony and harassment. In our considered opinion there are circumstances which justify for award of such compensation. LEARNED Forum has awarded cost in the sum of Rs. 2,000/- to the complainant No. 2. In our considered opinion that direction also appears to be just and proper. LEARNED Forum has also awarded cost of Rs. 5,000/- in favour of the complainant No. 1 Society. In our considered opinion that award is also just and proper.

BEARING in mind the facts and circumstances of the case noted hereinabove we pass following order: Impugned order dated 13th November, 2003 rendered by the learned Ahmedabad City Consumer Disputes Redressal Forum in Complaint No. 322/2003 is hereby modified by replacing the amount of Rs. 3,37,349/- by the amount of Rs. 2,16,800/-, that is to say that the opponent Insurance Company will be liable to pay to the complainant No. 2 Rs. 2,16,800/- as per the direction (a) contained in the impugned order. Rest of the impugned order contained in the directions (b) and (c) with rectification of the words in direction (c) ''to the complainant No. 1'' instead of ''to the opponent No. 1'', are hereby maintained. An amount of Rs. 25,000/- is stated to have been deposited by the opponent Insurance Company in this Commission shall be verified and repaid to it with interest, if any, by A/c payee cheque. The opponent Insurance Company will pay the amount as per the above modified order to the complainants within six weeks from today. This appeal is partly allowed with no further order as to cost. Appeal partly allowed.