NEW INDIA ASSURANCE CO LTD vs Jagdish Saini

THIS appeal under Section 15 of the Consumer Protection Act, 1986 (hereinafter referred to as ''the Act'') has been filed by the appellants on 13.8.2004 against order dated 16.6.2004 passed by the District Forum, Jaipur -II, Jaipur in Complaint Case No. 716/2003 by which the complaint of the respondent was partially allowed and the appellants were ordered to pay Rs. 3,75,000/ - to the complainant respondent within two months for the theft of the vehicle belonging to the complainant respondent and further for mental agony Rs. 2,000 and Rs. 1,000 were awarded as cost of litigation.

THE necessary facts given rise to this appeal are as follows : That on 31.7.2003 complainant -respondent filed a coplaint before the District Forum, Jaipur -II, Jaipur inter alia stating that the vehicle known as Toyota Qualis (referred to as ''vehicle'') bearing number RJ 141P 0387 was insured with the appellants for the period from 7.11.2001 to 6.11.2002 for consideration of Rs. 5 lakh and the cover note of that policy was Rs. 3,64,447. It was further stated by the complainant -respondent that on 25.8.2002 a person after showing him as a driver and on the pretext of booking of the vehicle had taken away the vehicle from the complainant respondent and thus committed the theft of the vehicle. It was further stated that the report of that incident was lodged by the complainant -respondent on 1.9.2002 with the Police Station, Sadar, Jaipur and FIR No. 314/2002 was chalked out. It was further stated in the complaint that the information to the appellant was also given of that incident. It was further stated in the complaint that the police after investigation submitted FR and that too was accepted by the Magistrate on 18.12.2002. The further case of the complainant was that thereafter the complainant -respondent submitted the claim before the appellants in the month of March 2003 but no reply was given by the appellants. Thereafter a legal notice was given and since the claim was not settled by the appellants, therefore, the complaint was filed by the complainant -respondent.

A reply was filed by the appellants before the District Forum inter alia stating that the complainant was not a consumer as he has not complied with the terms of the policy and further more since the report of theft of the vehicle was lodged after 7 days and the information of that incident was given to the appellants after 7 months and thus it was a clear breach of Condition No. 1 of the policy and in such case no amount was payable to the complainant -respondent. Thus the claim of the complainant -respondent was repudiated by the appellants on the above grounds. It was further replied by the appellants that at the most the case be treated as a case of sub -standard and in the case of sub -standard 25% amount could be deducted and since the Surveyor had made a loss to the tune of Rs. 2,53,500 and thus after deducting 25% of the amount at the most Rs. 1,89,125 should have been paid to the complainant respondent.

After hearing both the parties the District Forum decreed the claim as stated above inter alia holding : (1) That on the date of accident the vehicle was insured with the appellants. (2) That during the period of the policy the vehicle was stolen. (3) That about the theft of the vehicle in question a report was lodged by the complainant respondent on 1.9.2002 with the Police Station, Sadar, Jaipur on which FIR No. 314/2002 was chalked out by the police. (4) That during the investigation police submitted FR and the same was accepted by the concerned Magistrate on 18.12.2002. (5) That in case a report of theft was lodged after 7 days and claim was preferred after 7 months it would not make any difference except that the claim could be treated as claim of sub -standard and the amount could be made payable after deducting 25% from the main amount. (6) That the claim of the complainant -respondent was repudiated wrongly and by doing so there was deficiency in service on the part of the appellants. (7) That since the vehicle in question was insured for Rs. 5 lakhs, thus after deducting 25% amount under the head sub -standard Rs. 3,75,000/ - were payable to the complainant -respondent.

Aggrieved from that order this appeal has been filed by the appellants and the following submissions have been raised in this appeal : (1) That since the vehicle in question was stolen by the driver of the complainant -respondent, therefore, in such a case it should not be treated that the vehicle was stolen but it was a case of breach of trust and since policy was for theft, therefore, under that policy the complainant respondent is not entitled to any claim.

(2) Since the report was lodged after 7 days and claim was preferred after 7 monts, therefore, from that point of view also if condition No. 1 of the policy had to be taken into consideration, the claim was rightly repudiated by the appellants and the findings of the District Forum on this count are erroneous one and should be set aside.

(3) That since the incident of theft was lodged after 7 days, therefore, it should be treated as no incident had taken place.

(4) That the amount as was found due in Surveyors report should have been decreed after deducting 25% more.

ON the other hand the learned Counsel for the respondent has supported the judgment of the District Forum.

WE have heard the learned Counsel appearing for both the parties and have gone through the entire material available on the record. Point No. 1 In this case there is no dispute on the point that the vehicle in question was stolen by the driver of the complainant -respondent on 25.8.2002 and there is also no dispute on the point that the report of the incident was lodged by the complainant on 1.9.2002 and the claim was preferred after 7 months in the month of March 2003. There is also no dispute on the point that on the alleged date of theft i.e., 25.8.2002, the vehicle in question was insured with the appellants. There is also no dispute on the point that the police has submitted FR No. 123/02 in this case on 26.11.2002. There is also no dispute on the point that as per letter dated 7.4.2003 issued by the appellants the claim of the complainant was repudiated on the ground that as per investigation report the case was of not stolen.

THE State Commission, New Delhi in the case of Oriental Insurance Co. Ltd. v. Mahavir Singh & Ors. reported in I (2000) CPJ 197=2000 (3) CPR 97 has observed that when the insured truck was taken away by its driver, claim could not be repudiated on plea that loss caused was due to ''criminal breach of trust'' and not by ''theft''.

SIMILARLY the State Commission, Uttar Pradesh, Lucknow in the case of Oriental Insurance Co. Ltd. v. Anil Kumar & Ors., reported in II (1999) CPJ 498=2000 (1) CPR 302 has observed that when even if vehicle is taken away by driver dishonestly it would amount to theft and Insurance Company would be liable to settle claim for theft under the policy. On that point the law laid down by the National Commission in the case of Venkateshwara Borewells v. Oriental Insurance Co., reported in III (2002) CPJ 308 (NC), may be referred to.

THIS Commission is also in agreement with the law laid down by the above two State Commissions and further approved by the National Commission on the subject and thus it is held that even a vehicle is taken away by the driver it would amount to theft. Therefore, the submission of the learned Counsel for the appellants that the present case was not a theft stands rejected.

Point No. 2 :

ON point No. 2 the case of the appellants is that since it was a case of breach of condition No. 1 of the policy, therefore, claim was rightly repudiated by the appellants. The Honble Supreme Court in the case of Modern Insulators Ltd. v. Oriental Insurance Co. Ltd., reported in I (2000) CPJ 1 (SC), has held that ''Exclusion Clause'' neither part of contract of Insurance nor disclosed to insured : No benefit available to Insurance Company. Apart from this it may further be stated here that the insured has a duty to disclose and similarly it is the duty of the Insurance Company and its agents to disclose all material facts in their knowkedge since obligation of good faith applied to them equally.

Before proceeding further, it may be stated here that in terms of Article 12 of the Constitution of India, Insurance Company is ''the State'' and accordingly, agents of Insurance Company are bound to disclose full information relevant and advantageous to insured. The purpose of creating a company is to serve the interest of consumers.

SINCE there is no proof of fact in this case that the terms of the policy were made known to the complainant -respondent, therefore, in such a case the Insurance Company cannot take the benefit of exclusion clause.

FOR the reasons mentioned above the argument that the benefit of exclusion clause have been given to the appellants cannot be appreciated and stands rejected. Thus the law laid down in the cases reported in 2004 NCJ 227 (NC), IV (2004) CPJ 15 (SC) and 2001 (2) T.A.C. 243 (SC) would not come to help the appellants as the facts of the present case stand distinguished. Point No. 3 Since there is no dispute on the point that alleged theft had taken place on 25.8.2000 and the report was lodged on 1.9.2002 and there is no doubt that the delay of 7 days but since in this case vehicle was stolen by the driver of the complainant -respondent, therefore, it was normal on the part of the complainant respondent to wait for return of the driver for some days and when the driver did not return with the vehicle a report was lodged by the complainant -respondent after 7 days. Thus this delay should not be treated as a delay fatal either to the complainant respondent or to the claim preferred by the complainant -respondent. Point No. 4

ON point No. 4 the District Forum in its impugned order at page 4 has observed that since the report of theft was lodged by the respondent with delay and since the appellants were informed after 7 months, therefore, the District Forum treated the claim of the respondent as a claim of sub -standard and from the amount of Rs. 5 lakhs for which car was insured 25% was deducted. But the District Forum has not touched the case of the appellants as put forward by them in their reply.

THE appellants in their additional pleas have categorically stated that no doubt in special cases there is a provision for treating the claim as sub -standard. In such case deduction upto 25% could be made but that could have been done after assessing the value of the stolen property on the date of theft. Since in this case there was a Surveyor report dated 24.3.2003 which reveals that the market value of the Qualis of 2000 model on the date of theft was Rs. 2,55,000, therefore, 25% should have been deducted from the amount of Rs. 2,55,000 and not from Rs. 5 lakh. It may further be stated here that this aspect was not considered and touched by the District Forum in its impugned order.

Before proceeding further law relating to the importance of the Surveyor report should be discussed. The National Commission in the case of New Horizon Sugar Mills Ltd. v. United India Insurance Co. Ltd. and Ors., reported in IV (2003) CPJ 81 (NC)=2003 (3) CPR 136 (NC) has observed that report of Surveyor appointed under the provisions of Insurance Act have to be given greater importance. The National Commission has further observed in the case of M/s. Natain Cold Storage and Allied Industries Ltd. v. Oriental Insurance Co. Ltd., reported in 2003 (3) CPR 114 (NC) that Surveyors report in insurance claim is an important document which cannot be brushed aside easily. Thus from the above two citations the importance of the Surveyor report has come into picture.

IN this case there is no dispute on the point that the Qualis car which was stolen was of the model of 2000 and the same was stolen on 25.8.2002. There is also no dispute on the point that the same was insured for Rs. 5 lakhs. Since some infirmities were committed by the respondent, therefore, his claim was treated as sub -standard and for that this Commission also agreed with the findings of the District Forum that it was a case of non -standard claims. So far as the legal position of non -standard claim is concerned for that the law laid down by the National Commission in the case of National Insurance Co. v. Sh. Prem Chand, reported in II (2001) CPJ 60 (NC)=1986 -2002 Consumer 5408 (NS) may be referred to where the National Commission has accepted the legal position of the sub -standard claims.

THE question for consideration is whether 25% deduction should be made from the amount determined by the Surveyor report or from the amount of the policy of insurance i.e., Rs. 5 lakhs. Since in this case the car was stolen in the year 2002 though it was a model of the year of 2000, therefore, some depreciation should have been allowed and for that the Surveyor report in this case should have been looked into and the same has not been looked into by the District Forum and for that point the judgment of the District Forum suffers from basic infirmity. The Surveyor in his report dated 24.3.2003 has clearly observed that the market price of the Qualis of August -September 2000, was readily available for Rs. 2,55,000 on 24.3.2003. Therefore, on the date of theft the value of the car should be assessed as Rs. 2,25,000. The Surveyor has further observed in his report that the valuation is further subject to terms, conditions and acceptions and policy clause. In our considered opinion since the Qualis car was purchased in the year 2000 and was stolen in the year 2002, therefore, if the market value of the car as assessed by the Surveyor was Rs. 2,55,000 non -standard claim could be settled upto maximum 75% after deducting 25%. Thus the respondent would be entitled to Rs. 1,91,250 in place of Rs. 3,75,000.

THUS the findings of the District Forum by which Rs. 3,75,000 were ordered to be given to the complainant -respondent cannot be sustained as indicated above.

FOR the reasons mentioned above the appeal filed by the appellants is partly allowed and the impugned order dated 16.6.2004 passed by the District Forum, Jaipur -II, Jaipur is modified in the manner that in place of Rs. 3,75,000 the respondent would be entitled to Rs. 1,91,250 from the appellants. It is further made clear that from the date of presentation of the complaint respondent would further get simple interest @ 12% p.a. till the amount is paid to him on the said amount from the appellants. Rest amount as awarded by the District Forum is maintained. Appeal partly allowed.