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Judgment
NOT being satisfied with the award passed by the District Forum awarding compensation of Rs. 2,25,000/- the complainant has approached this Commission by filing this appeal against the order dated 26.10.1998 passed in Complaint No. COM/280/96.
WE do not deem it necessary to narrate the facts in detail which led to filing of this appeal since the parties have agreed on the facts and they are not in controversy before us. However, we will narrate the facts in brief which led to filing of this appeal before this Commission. The complainant, who is a Senior Advocate practising at Udupi, had owned a Maruthi Car 1000 CC bearing Registration No. KA-20/M 2000 registered on 14.3.1991 which was insured with the opposite party for Rs. 3,37,000/- for the period from 22.2.1995 to 21.2.1996 by paying a premium of Rs. 5,343/-. On 15.12.1995 near Balaipade on National Highway-17 Udupi, the said car met with major accident in which all the inmates numbering three died instantaneously and the car was totally smashed. Immediately, a complaint was lodged before the jurisdiction police and intimation was sent to the Insurance Company-opposite party. The car was then shifted to St. Jude Automobiles (Maruthi Authorised Service Station) Ambalpady, where it was estimated that the repair of the said car will cost Rs. 5,02,667/-, which was found to be much more than the value of the car itelf. The complainant lodged a claim petition before the opposite party to indemnify the damages. The Insurance Surveyor one Janardhan Heble inspected the vehicle at the Maruthi Authorised Service Station in the presence of the complainant and dismissed about the possibilities of repairing the car with the replacement of the damaged parts within a reasonable cost. Since the cost of repair was likely to exceed the insured value, the idea of getting it repaired was given up and the claim was processed for settlement on the basis of ''Total Loss''. All the necessary documents were produced by the complainant to the Insurance Company. However, the Insurance Company offered to pay a sum of Rs. 2,25,000/- and to settle the claim of the complainant subject to the surrender of salvage value and the R.C. The complainant did not accept the said offer as it was too low when compared to the actual value of the Maruthi Car on the date of the accident and also the insured value of Rs. 3,37,000/-. The complainant''s further case was that during the year 1995, at the time of the accident, there was a great demand for Maruthi 1000 Cars and the people were ready to buy the said model by paying a premium of Rs. 50,000/- or even more. He has also contended that the said car was fitted with several extra fittings like Air-Conditioning, Sterio, powerful bosh horn and other electrical gadgets, the value of which alone exceeded Rs. 30,000/- to Rs. 40,000/-. Under such circumstances, the offer made by the Insurance Company of Rs. 2,25,000/- was highly inadequate, insufficient and amounts to service deficiency. Hence, the present complaint was filed to direct the opposite party to pay to the complainant the insured value of Rs. 3,37,000/- with interest at 18% p.a., compensation and costs of the proceedings. On receipt of the notice from the District Forum, the opposite party appeared through an Advocate and filed its written version. In the said version, it has admitted the insurance policy being in force, accident of the vehicle and also the survey report submitted before it. The Insurance Company also admitted that it was ready and willing to settle the claim on ''total loss basis'' at Rs. 2,25,000/- subject to surrender of salvage with the R.C. and in fact this offer was made on 3.9.1996 by means of a letter which was refused to accept by the complainant. The Insurance Company had decided to settle the claim on ''total loss basis'' and hence it was ready to pay the complainant the market value of the vehicle on the date of the loss and not the insured value. On these grounds, it urged before the District Forum to dismiss the complaint.
On behalf of the complainant, the complainant got himself examined as C.W. 1 and produced few documents. He also produced the affidavits of two respectable persons - one, a practising Advocate at Udupi and the other, a leading doctor, who was also practising at Udupi to show that they were ready and willing to purchase the said car for a sum of Rs. 3,00,000/-. But, they postponed to buy it in the month of January, 1996. In the meantime, the said accident took place.
ON behalf of the opposite party, the Surveyor Sri Janardhan Heble was examined as R.W. 1 and through him Exs. R1 to R3 were got marked. The District Forum, after hearing the rival contentions and after going through the materials placed by the parties, has come to the conclusion that the complainant was entitled to the market value of the vehicle on the date of the accident and he was not entitled for the insured sum. On this ground, it has passed the impugned order.
IN this appeal, the complainant/appellant appeared in person before this Commission. On behalf of the respondent-INsurance Company, we heard Mr. Poonacha. They took us through the judgment of the District Forum as well as the materials produced before us. The appellant submitted before us that the District Forum was not justified in awarding the market value of the vehicle at the time of the accident instead of awarding the sum insured. His alternative argument was that even while granting the market value, the District Forum committed serious error in awarding a sum of Rs. 2,25,000/- on the basis of the report submitted by the Surveyor overlooking the evidence of the complainant and the affidavits filed by two respectable persons who were willing to purchase the said vehicle at the time of the accident. According to him, the District Forum has not considered the said affidavits filed by those persons and the approach of the District Forum in deciding the market value only on the basis of the Surveyor''s report was erroneous and has caused miscarriage of justice. On the other hand, we heard the learned Advocate Mr. Poonacha on this point. He submitted that the District Forum was justified in placing reliance on the report of the Surveyor who is an independent person who has no bias against any of the parties. He pointed out that the entire approach of the case by the District Forum in awarding a sum of Rs. 2,25,000/-, which was the market value at the time of the accident, was just and proper and the order passed by the District Forum does not call for interference. The short point for consideration in this appeal is whether the District Forum was justified in awarding the market value instead of the insured sum ? If so, whether the District Forum was justified in granting a sum of Rs. 2,25,000/- as the market value of the vehicle at the time of the accident.
THE District Forum, following the decision reported in I (1998) CPJ 362, THEen Metals Pvt. Ltd. v. National Insurance Co. Ltd., has come to the conclusion that the insured is entitled to get the market value of the vehicle at the time of the accident and not the insured amount. This is what the District Forum has observed in its order : "THE condition in the policy when read with the insurance manual it is clear to our mind the actual value means the market value as on the date of loss and cannot be the insured value. THE insured value is always based on the insured''s estimated value declared in the proposal form, which the Company accepts it with the utmost good faith without further scrutiny. At the time of settlement of any claim if the declared value is found to be in excess of the market value it will be a case of over-valuation and therefore, the Company is at liberty to bring it down to the market value. THEse conditions are incorporated to avoid as far as possible, the over-valuation or even under-valuation. In case of total loss the Company is liable to restore the vehicle to its original condition as it stood on the date of loss and therefore, it was reasonable to deduct the depreciation for the period of use in order to put it in the same condition as on the date of accident and then to decide its market value for the purpose of payment of loss. If the market value is found to be less than the insured''s estimated value the Company is liable to pay only the market value."
ACCORDING to us, the view expressed by the District Forum is correct and it does not call for interference. Now, coming to the point whether the District Forum was justified in fixing the market value at Rs. 2,25,000/-, the District Forum has fixed this amount only on the basis of the report and the evidence of the Surveyor. The Surveyor, in his evidence, has stated that the market value of the car in the year 1996 as on the date of accident was Rs. 2,20,000/-. However, in the cross-examination, he has admitted that the value of the vehicle depends upon the age of the vehicle and re-sale value , as prevailing, the value of second hand cars depend upon its condition also. The complainant, in his evidence, has stated that the Senior Divisional Manager and another employee of the Insurance Company had offered him to pay a sum of Rs. 2,85,000/- over phone. He had asked them to give it in writing, but they did not give it in black and white immediately. On 13.9.1996, they sent a reply offering to pay a sum of Rs. 2,25,000/-. In the cross-examination, he has further admitted that he has informed the Company that he will be agreeable to settle the claim for a sum of Rs. 3,00,000/-, but the Company offered to pay him Rs. 2,85,000/-. In addition to the evidence of the complainant, the complainant has produced the evidence of two respectable persons - one, a doctor, practising at Udupi, an Income Tax Payee and possessing a car. He had occasion to see the Maruthi 1000 Car bearing Registration No. KA-20-M 2000 belonging to the complainant and he had given a proposal to purchase the car of the complainant in the month of November, 1995, for a sum of Rs. 3,00,000/-. But the complainant was demanding more amount and after bargaining, he had agreed for a sum of Rs. 3,00,000/- and he had intended to purchase the said vehicle in the month of January, 1996. He has also stated that the market value of the said car during the period of December, 1995 was Rs. 3,00,000/- which was fair and reasonable. Similarly one Mr. K.C.M. Bhakta, an Advocate, practising at Udupi, has sworn to an affidavit stating that he is an Advocate practising for 25 years owning immovable properties and possessing a Fiat Car. He has further deposed that he had offered to purchase the car of the complainant for a sum of Rs. 2,95,000/- in the month of December, 1995, during the negotiation, it was finally decided to sell the car for a price of Rs. 3,00,000/-. Since the complainant requested him to approach in the 1st week of January, 1996, he could not purchase the said car at that time and in the meantime the car met with an accident. He has further deposed, the market value of the said car during December, 1995, was more than Rs. 3,00,000/-. The said statement made by these two persons have not been controverted by the opposite party. They have not been called for by the opposite party for cross-examination. Hence, the statements made by these witnesses in their affidavits remain uncontroverted.
The "market value" has not been defined either under the Motor Vehicles Act or under the Consumer Protection Act. Hence, we have to give a common meaning as we are using in common parlance. The "market value" is the value which is prevailing in the market. In the present case, as mentioned above, the Surveyor has admitted in his cross-examination that the value of the vehicle depends upon the age of the vehicle and re-sale value as prevailing. As could be seen from the affidavits filed by the two persons, they were prepared to purchase the said vehicle for a sum of Rs. 3,00,000/-. That was the market value prevailing at the time of the vehicle which met with an accident.
THE District Forum has nowhere considered the affidavits filed by those persons. It was carried away by the report submitted by the Surveyor. Even, the District Forum has not referred to the admission made by the Surveyor in his cross-examination. Hence, the District Forum was not justified in fixing the market value of the vehicle at Rs. 2,25,000/-. THE District Forum, in its order, has directed the complainant/appellant to surrender the salvage and R.C. to the opposite party. An affidavit of one Mr. Godwin Prabhakar has been filed before this Commission. THE said Godwin Prabhakar is a Mechanic in Naveen Auto Works, Udupi. He has stated that he knew the complainant and the vehicle involved in the accident - Maruthi 1000 bearing Registration No. KA 20/M 2000 and also he knew the 1st opposite party-Insurance Company and most of the officials of the Company. He has further stated that his Garage is situated close to the Insurance Company and it was he who removed the damaged car at the instance of the police and at the instance of the officials of the Insurance Company who took possession of the damaged car and at their request he took care of the said damaged vehicle in his garage. He has further stated that it was the Insurance Company''s Surveyor and Company''s Officer who asked him to remove the tyre and keep inside his garage and it was entrusted to his custody by the Insurance Company only. THE Insurance Company took possession of the salvage immediately after the vehicle was surrendered to the R.T.O. and they used to come and see the vehicle now and then. He had requested the Insurance Company to take the salvage or sell the same to him. But they avoided on one pretext or the other and the said damaged vehicle is in his possession as per the direction of the Insurance Company and it was only the Insurance Company who requested him to lookafter the vehicle or supervise till they remove from the spot or sell the same to him or to others for a good price. From the affidavit of the above person, it is seen that the damaged car is in possession of that person under the supervision of the Insurance Company and at their instance he has kept the damaged car. It is open to the Insurance Company to have the salvage and there is no question of complainant surrendering the salvage. Hence, the direction issued by the District Forum for surrender of salvage does not arise.
FOR the reasons mentioned above, we allow this appeal and enhance the amount from Rs. 2,25,000/- to Rs. 3,00,000/-. We also further direct that the said amount shall carry interest at 12% per annum from 26.11.1998 i.e., one month after the passing of the order by the District FORum. We further direct that the respondent-Insurance Company shall pay the said amount within a period of one month from the date of receipt of the copy of this order. We direct the parties to bear their own cost. Appeal allowed.