RAJNI DEVI vs United India Insurance Co. Ltd.

SMT. Rajni Devi, the complainant, had purchased on Opel Astra Car (RJ 20 C 7137) for Rs. 7,84,941/- from P.L. Motors, Jaipur on 6.7.1998. The said vehicle stood insured with the O.P.-Insurance Company for Rs. 7,85,000/- for the period from 6.7.1999 to 5.7.2000. During the period of the currency of the insurance policy, the said vehicle met with an accident on 21.4.2000 and was substantially damaged. The complainant removed the damaged vehicle to the Workshop of P.L. Motors at Jaipur, allegedly as per instructions of the O.Ps. and lodged her claim with them for payment of the assured sum on total loss basis. The O.Ps. appointed Swadesh Kumar Dhameja and Associates, Jaipur, Surveyors and Loss Assessor, to estimate and assess the loss to the damaged vehicle who assessed the same at Rs. 4,50,000/- on total loss basis and salvage at Rs. 1,65,000/- and advised the O.Ps. to settle the claim at Rs. 2,85,000/-. That amount was, however, not acceptable to the complainant. Hence the complaint claiming Rs. 7,85,000/-, the assured sum, Rs. 26,000/- as compensation for mental agony, and Rs. 2,000/- as towing charges with interest @ 24% p.a., besides cost of litigation.

THE case putforth by the O.Ps. is that the estimation of the damage caused to the insured vehicle at Rs. 4,50,000/- by the Surveyor and Loss Assessor was quite just and reasonable and since they had offered the same, (subject to deduction of the estimated value of salvage) to the complainant, the O.Ps. did not render deficient services to her. Dismissal of complaint with cost at Rs. 10,000/- was prayed for. The learned Counsel for the complainant urged that since the estimated insured value of the damaged car was at Rs. 7,85,000/- and it had got damaged beyond repairs, the complainant was entitled to get Rs. 7,06,500/-, after allowing depreciation @ 10% on total loss basis. In this behalf reliance was placed on the decision of the Hon''ble National Commission in the case of National Insurance Co. Ltd. v. Ani Lamba, I (2003) CPJ 229 (NC).

On the other hand the learned Counsel for the O.Ps. have urged that the Surveyor and Loss Assessor had made detailed study of the damage caused to vehicle and recommended that the claim may be finally settled at Rs. 4,50,000/-, subject to collection of salvage, on total loss basis, and Rs. 2,85,000/- on net loss basis. The learned Counsel relied upon the cases reported in I (1994) CPR 33 (NC), III (1997) CPJ 110 (NC), II (1998) CPJ 29 46 (NC) 402, (A.P. State Commission) and I (2003) CPJ 85 (NC).

AFTER having given our thoughtful consideration to the rival submissions and on study of the material on our record and the case-law relied upon by the parties we are of the opinion that the complainant should get Rs. 4,50,000/-, as repeatedly offered by the O.P.-Insurance Company to her, on total loss basis. It is the generally accepted principle that the object of the contract of insurance is principally to place the insured, as far as possible, in the same position, in which he would be if the event causing the loss/damage to the insured property had not occurred. The contract of insurance is not a contract to make a gain. It is to leave her neither a loser nor a gainer subject to her insuring the property for its full value. Almost all insurances other than life and personal accident insurance are contracts of indemnity. Therefore, the insurer Company may be asked to pay to the insured, in the cases of total loss of the insured property by theft, fire or otherwise resulting in damage to the property beyond repairs, the value of the property at the time of happening of the event resulting in its total loss/destruction or, in cases of other than of total loss or destruction, the amount of damage caused thereto.

JUDGED in the light of the above principles we find the position in the instant case like this. The subject vehicle was an OPEL ASTRA Car purchased by the complainant from P.L. Motors, Jaipur on 6.7.1998 for Rs. 7,84,941/-, inclusive of Local Sales Tax @ 6% and insurance, amounting to Rs. 44,431/-. It had met with an accident, opposite to Ranjit Talkies at Bundi - Jaipur Road, on 21.4.2000 around 1.30 a.m. by hitting into a tree, allegedly in an effort to save hitting into an incoming jeep. The O.Ps. had appointed the Surveyor on 27.4.2000 and the Surveyor had inspected the damaged vehicle on 29.4.2000 and subsequent dates. The Surveyor had made detailed examination of the damaged parts comprising of 48 items. The complainant had not permitted them to dismantle the vehicle so as to know the exact extent and nature of the damage caused to the affected parts inside. The Surveyor had thus assessed the loss, on repairs basis, at Rs. 4,25,000/- including assessed labour charges at Rs. 36,200/-. In doing so the Assessor had taken into account towing/spot labour charges, stripping and complete body re-assembly including A.C. charges, painting the body including the replaced parts, excluding three doors and tail gate, and wheel alignment charges. The Surveyor had assessed the damage on total loss basis at Rs. 4,50,000/-. In doing so, they had taken into account the insured-estimated value at Rs. 7,85,000/-, and had arrived at the market realisable value of the subject vehicle at Rs. 4,50,000/-, as on the date of loss, on the basis of cost of replacement of the similar type of vehicle. They had valued the salvage at Rs. 1,65,000/- and had then arrived at Net Loss Value of the vehicle at Rs. 2, ,000/-. From the letters sent by the O.P.-Company to the complainant through registered post on 7.11.2000, 14.11.2000, 27.2.2001 and 20.6.2001 it is gathered that they had offered a sum of Rs. 4,50,000/- to the complainant on Total Loss Basis and required her to duly execute the transfer deed in respect of the registration of the vehicle, and deliver the possession thereof to them. There was no response, to these requests, from the side of the complainant. We note that in offering an amount of Rs. 4,50,000/- in full and final settlement of complainant, the O.Ps. had acted in good faith inasmuch as that they do not appear to be insisting upon the complainant taking the salvage. In our opinion the amount offered was the highest of the estimates made on repair, total loss and net loss basis. This offer, we think, was quite just and reasonable in the facts and circumstances of the case wherein the vehicle had been used by the complainant for more than 1 years after its purchase and the exact extent and nature of damage caused to the vehicle could also not be known and ascertained due to complainant''s not permitting the dismantling thereof. Further the depreciation factor has been taken due note of in arriving at the market value of the vehicle of the same type at the date of accident. It is note-worthy that the complainant had produced no evidence to rebut the estimated market value of the vehicle as determined by the Surveyor, whose report is quite elaborate and reasoned. We accordingly accept Surveyor''s report recommending payment of Rs. 4,50,000/- to the complainant in full and final settlement of her claim on Total Loss Basis.

THE complainant had also prayed for payment of the rent of the damaged vehicle at Rs. 2,26,000/- as allegedly claimed by P.L. Motors from her through their notice dated 26.5.2003. Not only that no agreement between the complainant and P.L. Motors, Jaipur to pay any rent for keeping the damaged vehicle in the workshop has been produced but also that we find no bill of demand from P.L. Motors to the complainant in that respect. Producing the notice, sent by a Lawyer of P.L. Motors, without any proof of complainant''s making any payment of rent to the P.L. Motors on the basis of such notice, would not go to impose a pecuniary liability upon the O.Ps. particularly in absence of a contract between the parties to that effect. We accordingly reject such a claim made by the complainant.

IN the result, the complaint is partly allowed and the O.P.-Company is directed to pay a sum of Rs. 4,50,000/- to the complainant towards full and final settlement of her claim with interest @ 10% p.a. from 1.9.2000 within a period of three months from the date of service of the copy of this order on them, failing which the interest would be payable at increased rate of 12% p.a. With a view to avoid any confusion to the parties in the matter of payment of the amount of compensation by the O.Ps. and delivery of the documents of transfer of the vehicle by the complainant to them we further direct that if the parties fail to discharge their respective obligations, within the period specified above, the O.Ps. shall deposit the decretal amount with the District Forum through demand draft and obtain the salvage from P.L. Motors and transfer of Registration Certificate etc. from the Transport Authorities on the basis of this order. In the above facts and circumstances, the parties shall bear their own costs. Complaint partly allowed.