Oriental Insurance Company Ltd. vs MUMBEEN

THIS appeal is directed against the order dated 2.3.2002 passed in Case No. 60/2001 by the District Consumer Disputes Redressal Forum, Chhindwara (for short the ''District Forum'') whereby the complaint for deficiency in service in not making the payment of claim of Tempo Trax bearing registration No. MP-28 A-7866 Engine No. D-01023776 and Chassis No. T-55010664399 financed with Ashok Leyland Finance Ltd. purchased under hire purchase, stolen on 5.6.2000 was allowed with an order to pay the insured estimated value of Rs. 3,74,000/- with interest thereon at the rate of 12% p.a. from 12.9.2001 along with Rs. 1,000/- as costs of the proceedings.

AFTER hearing learned Counsels for the parties and on reappraisal of evidence on record, the submission of learned Counsel for the Insurance Company that the vehicle was not stolen but the driver of the insured appeared with the vehicle of which FIR was lodged by the respondent at Police Station Parasia on which a case under Section 408, I.P.C. was registered at Crime No. 389/2000, therefore, such a claim was not covered under the policy, hence, Insurance Company vide letter dated 12.9.2001 rightly repudiated the claim be accepted. The National Commission in a case of the Oriental Insurance Company Limited & Anr. v. Rohit Kumar Gupta, 1994 (1) CCC 328 (NS), a case wherein the driver disappeared with the car entrusted to him for plying as taxi observed that what would constitute the offence of theft is to be seen from the language used in the provision of Section 379 of I.P.C. Illustration-D to that section clearly and directly covers the contingency which was occurred in the case, the person who had been entrusted with an article or an item of goods dishonestly running away with the said article, such being a legal position, the National Commission was of the opinion that the Insurance Company should not have adopted such an attitude at all, but should have paid up the money covered by the insurance policy to the respondent.

In a recent pronouncement in Khem Chand Sapra v. Oriental Insurance Company Limited, III (2002) CPJ 126 (NC)=1986-2002 CONSUMER 6574 (NS), a case where driver of truck was also charged for an offence along with other accused under Sections 379 and 364 of I.P.C., after referring to the decision in 1998 (1) CCC 328 (supra), observed that case of theft by the driver also falls within the ambit of Section 379 of I.P.C. Illustration-D.

THIS Commission in case of Deepak Agency v. Oriental Insurance Company Limited, III (1995) CPJ 38, a case where the driver of the truck disappeared with the truck, the Insurance Company repudiated the claim on the ground that it was a case of criminal breach of trust, following the decision of National Commission in S. Bhagat Singh v. The Oriental Insurance Company Ltd., II (1991) CPJ 700 (NC), observed that if the driver dishonestly took away the vehicle, the case would be covered by Illustration (D) appended to the definition of ''theft'' given in Section 378 of I.P.C. and the driver would be deemed to have committed theft of the vehicle. In such circumstances, this Commission held that the Insurance Company committed an error in repudiation of claim, which was a deficiency in service on the part of the Insurance Company. In view of the above we hold that, the Insurance Company was deficient in not making the payment of the claim.

ADMITTEDLY on lodgement of the claim the Insurance Company have not appointed Surveyor to assess the market value of the Tempo Trax of 1999 Model. The insured estimated value of the vehicle is Rs. 3,74,000/-. In such circumstances, after giving a depreciation of 10% the amount would come to Rs. 3,36,600/- which shall be paid by the Insurance Company with interest at the rate of 6% p.a. from 12.9.2001 i.e. the date of repudiation as in view of change in economy and policy, the Reserve Bank of India has lowered down the rate of interest and Rs. 1,000/- as costs of the proceedings throughout within a period of two months from the date of receipt of certified copy of this order failing which interest would be payable at the rate of 9% p.a. In the result, the appeal is partly allowed. The order of the District Forum shall stand modified as indicated hereinabove. A copy of this order be conveyed to the parties and a copy be sent to the District Forum along with the record of the case. Appeal partly allowed.