ORIENTAL INSURANCE CO LTD vs Shakarbhai Ramdas Marfatia

THIS appeal is filed by the Oriental Insurance Company Ltd. against the order dated 31.5.93 passed by the Consumer Disputes Redressal Commission, Gujarat by which the Insurance Company was directed to pay Rs. 2,63,000/ - as compensation and/or damages to the complainant with costs of Rs. 2,000/ -.

THE facts of this case briefly summarised are that the complainant purchased a truck in the year 1985 and insured it with the Insurance Company for the period commencing from March 25,1989 to March 24,1990 and paid full amount of premium for the estimated value of Rs. ,80,000/ -. During the currency of the policy, the truck was stolen on 19th February, 1990. The complainant preferred a claim with the Insurance Company and submitted all the relevant documents. The Insurance Company appointed a Surveyor who submitted his report on 15th July, 1990. After about seven months, the Insurance Company offered an amount of Rs. 1,74,500/ - to the complainant which was not accepted by the complainant. The Insurance Company was asked to reconsider the claim but it was not done. The Insurance Company sent a voucher for Rs. 1,74,500/ - in full and final settlement which was not accepted by the complainant. In these premises, the complainant filed a com plaint before the State Commission. 3. The stand taken by the Insurance Company before the State Commission was that the valuation assessed by the Surveyor at Rs. 1,75,000/ - reflected the market value of the stolen truck. The only point raised before the State Commission for consideration was as to what was the market value of the truck at the date of the theft.

AFTER considering the material placed on record by the parties, the State Commission came to the finding that the value of the truck at the relevant time was Rs. 1,75,000 - as assessed by the Surveyor. As a consequence, the State Commission directed that the Insurance Company should pay Rs. 1,75,000/ - plus interest @ 12% as claimed by the claimant which came to be Rs. 63,000/ - and besides that Rs. 25,000/ - also be paid on account of change of tyres and spare parts etc. In all, the complainant was entitled to Rs. 2,63,000/ -. The State Commission further directed that the Insurance Company should pay the aforesaid amount of Rs. 2,63,000/ - within a period of three weeks from the date of receipt of the order, failing which, the Insurance Company should pay interest @ 18% on that amount till realisation. Aggrieved by the order of the State Commission, the Insurance Company preferred this appeal.

WE have heard the learned Counsel for the parties and have gone through the records of the case with their help. The main grievance raised on behalf of the Appellant was that after assessing the value of the vehicle at Rs. 1,75,000/ -, the State Commission should not have awarded a further sum of Rs. 25,000/ - on account of change of tyres, spare parts, etc. We have examined the record in the light of the submissions made on behalf of the Appellant. The complainant had overhauled and re paired the truck in the year 1989 by spending Rs. 54,000/ - which is evident from the bills produced by the complainant. The Surveyor did not take into consideration the cost for the change of tyres and other spare parts for which the complainant had spent Rs. 54.000/ - in the year 1989. In these circumstances, the State Commission was right in holding that the amount spent by the complainant for change of tyres and spare parts was to be added to Rs. 1,75,000/ -. But as the truck was used by the complainant for certain period after change of tyres, spare parts, etc., an amount of Rs. 25,000 / - was to be added to the value of the truck assessed at Rs. 1,75,000/ -. We find no fault in the reasoning rendered by the State Commission. The contention raised on behalf of the Appellant is without merit and is repelled.

THE other point that was canvassed be fore us on behalf of the appellant was that the State Commission grossly erred in awarding interest @ 12% p. a. on the amount of Rs. 1,75,000/ - as the Insurance Company had assessed the value at that amount and which assessment had been accepted by the State Com mission. The amount was offered to the complainant but he declined to accept it. Thus, there was no fault or deficiency in service or negligence in the settlement of the claim by the Insurance Company.

WE have considered this aspect. The State Commission awarded interest to the complain ant for the reason that the Insurance Company made an offer of Rs. 1,75,000/ - but had not actually paid the amount as receipt in full and final settlement had not been given by the complainant. That meant that the offer was not un conditional which the complainant was not bound to accept and was actually not accepted. In our opinion, the reason given by the State Commission for awarding interest to the complainant was justified in the facts and circumstances of the case. We find no merit in the contention raised on behalf of the Appellant that the State Commission wrongly awarded interest @ 12%. It was further urged on behalf of the Appellant that the State Commission, in the default clause, awarded interest @ 18% on the amount of Rs. 2,63,000/ - which also included interest. We find merit in this contention. We modify the default clause to the extent that in case compensation awarded by the State Com mission was not paid within a period stipulated by the State Commission, the Insurance Com pany would be liable to pay interest @ 12% on the amount of Rs. 1,75,000/ - till the date of payment. We modify the order of the State Commission to this extent; otherwise we find no merit in the appeal and is dismissed, leaving the parties to bear their own costs.