Oriental Insurance Co. Ltd. vs SINDHU B. THAMPI

THE opposite party M/s. Oriental Insurance Company Limited against which an award has been passed by the District Forum is the appellant. THE complainant insured with the opposite party his lorry. On 8.12.1993 the lorry met with an accident during the currency of the insurance. He made a claim with the opposite party for a sum of Rs. 1,11/411.64. THE opposite party offered a sum of Rs. 39,297/- only which was not acceptable to the complainant. Alleging deficiency in service on the part of the opposite party the complaint was filed.

THE opposite party contended that the complainant had replaced the damaged parts with only second hand ones and not new ones and he would be entitled to a sum of Rs. 39,297/- which was offered to him. The District Forum on consideration of the evidence came to the conclusion that the complainant is entitled to a sum of Rs. 94,988/- being the damage caused to the vehicle. It further held that the complainant would be entitled to a compensation of Rs. 5,000/ - for mental suffering. Finally it passed an award stating that the complainant would be entitled to Rs. 94,988/- with interest thereon @ 12% p.a. from 5.5.1994 and also a sum of Rs. 5,000/- as compensation and a further sum of Rs. 250/- as costs.

On hearing about the accident, the Insurance Company appointed a Surveyor and he submitted a report Ex. B6 dated 31.12.93 stating that the amount of damage payable to the insured is Rs. 67,000/-. But in spite of it the opposite party had offered only a sum of Rs. 39,297/-. The reason as to why the opposite party would not pay even the damages fixed by the Surveyor at Rs. 67,000/- is that the complainant had used old spare parts instead of new spare parts and as per the re-inspection report the amount spent by the complainant is only Rs. 39,297/- and therefore the complainant would be entitled only to that amount. But we do not see any merit in this case of the opposite party. It is not the case of the opposite party that the Surveyor''s report Ex. B6 assessing the damage at Rs. 67,000/- is not correct. That being the reason it does not appear to be proper on their part to reduce their liability to Rs. 39,297/- only because according to them the complainant has spent only that much amount using old spare parts. But as per the terms of the policy the Insurance Company is bound to pay to the opposite party the damages suffered by him and not the actual amount spent by him on the damaged lorry. It is left to the complainant to use new parts or old parts. That has nothing to do with the liability of the opposite party. When even according to the Surveyor of the opposite party, the damage to the lorry was Rs. 67.000/- and that value fixed by the Surveyor is not questioned by the opposite party the complainant would be entitled to that amount at least if not more. But as seen above according to the complainant he is entitled to a sum of Rs. 1,11,411.64. To claim this amount the complainant has filed certain bills alleged to have been obtained by the repairers or spare parts shops. But believing those bills it cannot be held that the complainant has spent that much amount or even Rs. 94,988/- awarded by the District Forum. Possibly those bills might be excessive ones purposely obtained by the complainant. In this view of the matter, we hold that an award can be passed for a sum of Rs. 67,000/- as fixed by the Surveyor as damages. For the balance amount claimed by the complainant he can initiate proceedings in a Civil Court where he could adduce further evidence and prove the claim. On the said sum of Rs. 67,000/- we are of the view that the complainant can be granted interest @ 15% p.a. from 5.5.1994 till date of payment. Since we are allowing interest on the amount of damages no award need be passed separately for any compensation.

IN the result in modification of the order of the District Forum we direct the opposite party to pay to the complainant a sum of Rs. 67,000/- with interest thereon @ 15% p.a. from 5.5.1994 till payment. There will be no order as to costs in this appeal. We give liberty to the complainant to file a suit if he so desires for any further claim. We believe that in that event the time taken before the District Forum and this Commission would be considered for limitation. Dissenting Order passed by : Pulavar V.S. Kandasamy, Member-I am sorry that I do not agree with the majority order. The facts of this case are furnished in the majority order. It is common ground of both the parties that the lorry which met with an accident on 8.12.1993 was insured with the opposite party. After the accident, the complainant arranged to carry out the repairs for the purpose of reinstating it to normal condition. The complainant claimed that the damaged parts were replaced by new original parts and, in support of her claim, she produced bills showing the price of new parts. When the opposite party Insurance Company conducted a re-inspection of the vehicle, they found that the complainant had replaced the damaged parts with duplicate and second hand parts and not with new original parts, though the complainant had produced bills as if she had purchased original parts. There is no dispute that on verification by the Surveyor, it was found that the vehicle was fitted with second hand parts. Thus, the complainant had not come with clean hands before the Forum.

IT is true that the Surveyor had submitted a report assessing the amount of damages payable at Rs. 67,000/-. But, it is to be noted that the said amount was payable to the complainant only if the materials approved and recommended by the Surveyor were utilised for the replacement of the damaged parts so that the insured vehicle would come to normal and good condition as it were at the time of insurance and satisfy its declared value contained in the policy. After perusing the Surveyor''s report and scrutinising the claim papers, the opposite party had fixed the amount of damage at Rs. 39,297/- based on the actual value of the parts replaced. It is to be noted that the Surveyor''s report is prepared taking into account the amount required to repair and reinstate the vehicle to the original good condition. The complainant is entitled for the amount estimated by the Surveyor only if the materials approved and recommended by the Surveyor were utilised. As the complainant had failed to carry out the repairs and replace the damaged parts on the basis of the Surveyor''s report, the question of granting a sum of Rs. 67,000/-, as fixed by the Surveyor, does not arise in this case. Another important point that has to be taken into account is the fact that the damaged vehicle continues to be covered by the insurance policy even after it has met with an accident. In other words, it is still under the cover of insurance. The opposite party Insurance Company, is under an obligation to pay to the complainant, in case of an accident, a sum for which the vehicle was insured originally. If so, the value of the vehicle should continue to be the same as shown in the insurance policy less, of course, the usual depredation allowable for the year. The value of the vehicle can continue to be same, as originally mentioned in the policy, only if the complainant had replaced the damaged parts with new and original parts, as suggested in the Surveyor''s report. On the other hand, in the instant case, the complainant had replaced the damaged parts with the second hand parts purchased from the salvage parts sales shop, resulting in the reduction of the value of the vehicle. This cuts at the very root of the terms and conditions of the policy.

IF the argument that the complainant should be granted the actual amount of damages fixed in the Surveyor''s report, irrespective of the fact whether the complainant had undertaken any step to get the vehicle repaired and bring it back to the normal position or road-worthy condition, is to be accepted then, in every case of accident, the complainants (insured) would ask the Insurance Company to pay the amount fixed as damages by the Surveyor straightaway, without spending even a single pie to put the vehicle back in a fit or normal or road-worthy condition. The claim for the payment of the amount of damages fixed by the Surveyor may hold good only in a case where the vehicle was a total wreck and not in other cases. Even in case of total wreck, the complainant is eligible for damages, less the salvage value.

IN the light of the discussion above, the opposite party is justified in granting a sum of Rs. 39,297/- being the actual amount spent by the complainant in replacing the damaged parts and to put the vehicle in a normal and road-worthy condition. In the result, the appeal is allowed; the order of the District Forum is set aside and the opposite party is directed to pay a sum of Rs. 39,297 /- to the complainant with interest at the rate of 18% p.a. from 05.09.94 till the date of payment. No costs. Appeal allowed.