Oriental Insurance Company Ltd. vs Gayatri Bai

THIS appeal is directed against order dated 4.4.2000 passed in Case No. 23/1997 by the District Consumer Disputes Redressal Forum, West Nimar, Mandleshwar (for short the ''District Forum'') whereby the complaint for deficiency in service in not making the payment of own damage claim of vehicle bearing registration No. MP-10 A-1100 comprehensively insured covering the risk from 14.2.1996 to 13.2.1997, met with an accident on 16.6.1996 was allowed holding that the repudiation of the claim vide letter dated 30.12.1996 on the ground that the vehicle was registered for private use was in use of commercial purpose carrying fare paying passengers was not established. Hence the Insurance Company was ordered to pay Rs. 26,803/- the amount of own damage claim as assessed by the Surveyor and to pay interest thereon at the rate of 12% p.a. from the date of repudiation along with Rs. 500/- as costs of the proceedings.

AFTER hearing Mr. Hemant Sharma, learned Counsel for appellant, the Insurance Company and Mr. V.K. Saxena, learned Counsel for the respondent and on reappraisal of evidence in record we do not find any illegality in the finding recorded by the District Forum that at the time of accident the vehicle was in use for commercial purpose to establish the use of the vehicle for commercial purpose except the report of the Investigator Vinod Kumar Bohra dated 4.11.1996, no material was placed even the affidavit of the Investigator was not filed to receive the report in evidence. It is well settled that when the Insurance Company avoids its liability on the alleged breach of the condition of the policy it has to discharge its burden to prove the same by legal evidence. Learned Counsel for Insurance Company also could not point out from the record that at the time of the accident vehicle was in use for commercial purpose. In the circumstances, the finding of the District Forum in our opinion does not call for any interference. In the circumstances, the District Forum rightly held that the repudiation of the claim was not on justifiable grounds.

As to quantum, the respondent claimed the amount of own damage claim on Rs. 53,000/- but the District Forum rightly ordered to pay Rs. 26,803/- as assessed by the Surveyor Rajender Singh vide his final survey report dated 17.9.1996. However the order of payment of interest at the rate of 12% p.a. on the amount of Rs. 26,803/- from the date of repudiation of the claim deserves to be reduced in the circumstances, of the case. The complaint was filed on 10.4.1997 which was decided by the District Forum on 4.2.2000 and the appeal filed on 6.5.2000 came up for hearing today, the delay in disposal of the case cannot be wholly attributed to the Insurance Company, therefore, the Insurance Company cannot be burdened to bear interest for the period spent in litigation. Moreover, it is well settled that in the absence of the contract; the interest is awarded on equitable grounds, which should not be low or high. See, the decision of Supreme Court in case of Ghaziabad Development Authority v. Union of India, II (2000) CPJ 1 (SC)=IV (2000) SLT 654=(2000) NCJ (SC) 386.

CONSIDERING the circumstances, the ends of justice would meet if the interest on equity is ordered to be paid at the rate of 9% p.a. on the amount of Rs. 26,803/- from the date of repudiation of the claim i.e. 30.12.1996. Accordingly, we direct the Insurance Company to pay the amount of Rs. 26,803/- with interest at the rate of 9% p.a. from 30.12.1996 till the date of payment along with Rs. 500/- as costs of the proceedings awarded by the District Forum within a period of two months from the receipt of certified copy of this order to the respondent failing which the interest shall be payable at the rate of 12% p.a. In the result, the appeal is partly allowed. The order of the District Forum shall stand modified as indicated hereinabove. In the circumstances, parties to bear their own costs. A copy of this order be conveyed to the parties and a copy be sent to the District Forum along with record of the case. Appeal partly allowed.