New India Assurance Co. Ltd. vs JAGDISH GOEL

THE respondent herein had filed a complaint against the appellant New India Assurance Co. Ltd. in the. District Forum, Gwalior complaining that the insurance company was not paying compensation on account of loss of vehicle because of theft which was covered by the insurance policy taken by the complainant/respondent from the non-applicant/ appellant. THE District Forum gave an ex-parte award of Rs. 77,000/- plus interest as the insurance company did not appear before it. An application for setting-aside the ex-parte order was made by the insurance company on 11.5.92. This application was also dismissed as the District Forum did not find sufficient cause for the absence and this appeal is filed by the appellant against the impugned order.

ON 31.7.92 when the case was set-out for hearing it was reported that the stolen vehicle had been recovered. This altered the entire complexion of the case as now the question was not of total loss but was of assessment of damage to the vehicle caused because of theft. We therefore called for a finding from the District Forum as to the loss caused to the vehicle. The District Forum after taking evidence has submitted this report. After the report was received, both the parties were again heard. Shri Hingorani learned Counsel for the appellant submitted that Under the policy if the vehicle was driven by a person who did not have valid driving licence, the insurance company is absolved of its liability. Apart from this basic objection he also challenged the assessment of damage by the Forum as excessive and without foundation.

In the changed circumstances, we need not go into the refusal of setting-aside ex-parte order by the Forum. For all practical purposes because the vehicle was traced, the question of what is the total value of the vehicle has lost significance. What is now to be decided is what is the. loss suffered by the. complainant/respondent because of the theft of the vehicle. For this purpose it is absolutely irrelevant whether the. vehicle was being driven by a validly licensed-driver or not. Shri Hingorani''s reference to a Andhra Pradesh High Court Judgment reported in 1992 ACJ 375 has no relevance. That case clearly related to an accident claim and not a claim on account of theft. So far as insurance against theft of a car is concerned, it is absolutely irrelevant as to whether the driver employed by the. complainant held a valid licence or not.

LET us now examine as to whether the assessment of damage to the vehicle by the Forum is in order. After the, remand of the case the. car was got examined by the complainant by Radhika Automobiles Pvt. Ltd. an authorised dealer of Maruti cars. They have submitted an estimate of Rs. 55,291. The. break-up is Rs. 22,863.95 as price of spare parts, Rs. 15,600/- as labour charges price of accessories Rs. 16825/- . The Insurance Company has also got it examined by it''s surveyor Shri Manohar Singh (DW-1), According to him the. estimate of expenses is Rs. 35,332.20. The breakup is Rs. 7985.33 for price of spare ''parts, Rs. 22766.87 price of spare parts and Rs. 6580/- labour charges. Shri Manohar Singh (DW-1) has also stated that since the parts which were to be replaced were used for a considerable time by the complainant depreciated value of such parts has to be counted. The District Forum has scrutinised this material and found that the estimate of Radhika Automobiles Pvt. Ltd. produced by the complainant is more reliable. We have no hesitation in agreeing with the conclusion of the District Forum that the estimate of Radhika Automobiles Pvt. Ltd. is more reliable. Firstly, they are the authorised dealers of Maruti Cars and have given an estimate with an implied assurance that they will get the job done in that amount. On the other hand what the insurance company has put up before the Forum is the statement of its surveyor. There is no guarantee that any other mechanic or car reparirer is ready to restore the vehicle to its previous condition on payment of amount of Rs. 35,332.20. Thus, this is only a theoretical assessment without there being any liability to do the job for that much amount. As regards depreciation of parts to be substituted by new parts, suffice it to say that if the vehicle had not been stolen, the complainant would have used it till the parts had run their usual life. Because of the theft the complainant was compelled to change the parts prematurally. This is not_ a situation created by the complainant himself. The theft of the vehicle has compelled him to change the parts and to pay the price for the same. The loss therefore is that he has to pay for the new parts earlier even though such parts will now run for a longer period. The vehicle was 1988 model and it was stolen on 8.7.89. Admittedly after 8.7.89 it was not used by the complainant. Thus, whatever depreciation of the parts be there, it was to be counted for a period of about 18 months or so. Reduction of value of spare parts would not be considerable even if this theory is accepted.

SO far as the grant of relief is concerned it is now clear that either the insurance company has to pay for restoration of the vehicle to its previous condition immediately before it was stolen or to pay for the total loss and take the vehicle itself. That would be the most equitable solution in the circumstances. We therefore direct that either the appellants pay Rs. 55,291/- to the respondent within a month from communication of this order and hand over the custody of the vehicle to the respondent if the custody is not already with the respondent or pay a sum of Rs. 77,000/- as earlier assessed by the District Forum as total loss with interest at the rate of 10% per annum from 14.8.90 till the date of payment keep the vehicle itself. This option has also to be exercised within a period of one month from the receipt of a copy of this order and the payment of the amount has to be made within that period. In the event the appellant chose the latter option, the vehicle will be transferred by the respondent to the appellant or its nominee by completing all legal formalities at the expense of the appellant within one month of receipt of this amount of Rs. 77,000/- . In the circumstances of the case parties shall bear the cost of this appeal. However, if the appellants choose to opt for payment of total loss of Rs. 77,000/- they shall also pay the cost of the proceedings before the Forum as directed by order dated 7.3.92 passed by the Forum. If the appellants chose to pay Rs. 55,291/- costs of proceedings before the Forum shall be. borne by both the parties as incurred by them. With these directions the appeal is disposed of. Appeal disposed of.