Rakesh Kumar Dwivedi vs BRANCH MANAGER, UNITED INDIA INSURANCE CO.

THIS appeal has arisen from order dated 28.11.1995 passed by Consumer Disputes Redressal Forum (for short District Forum) Betul in Complaint No. 10/95 by which the District Forum ordered that the case be sent for arbitration as per Section 8 of the insurance policy.

THE facts of the case in brief are that appellant had his truck insured with the respondent-Insurance Company. Insurance policy number was 190104/31/21/897/93 and it was valid for the period 11.12.1993 to 10.12.1994. Insurance policy was comprehensive and was issued in Betul. During the currency of the policy the truck met with an accident on 24.12.1993 on Paratwada-Sami Road. THE accident was reported to Divisional Manager, Amrawati because that was nearest branch of respondent to the spot of accident. Divisional Manager, Amrawati sent a Surveyor on spot immediately. THE Surveyor took photographs as per standard procedure and then instructed appellant (complainant in District Forum) to take the truck after necessary repairs on spot to workshop in Paratwada for repairs. Appellant did accordingly. After receipt of the report from Surveyor, the Divisional Manager, Amrawati sent a Surveyor for final survey, who again took photographs and also carefully scrutinized the various changed parts and the expenditure incurred. Appellant/ complainant in his complaint before District Forum stated that he spent Rs. 50,194/- and produced the receipts, etc. to Divisional Manager, Amrawati. Appellant further stated that Divisional Manager, Amrawati continued to assure him that his case would be finalised soon. However, nothing happened for one year and then on 17.1.1995, respondent informed the appellant that they have finalised the claim to the extent of Rs. 14,041/- which they are prepared to pay. If that was agreeable, the appellant should send a receipt to enable the respondent to make payment. In his complaint appellant/complainant brought to the notice of District Forum that respondent appointed another Surveyor who brought down the acceptable claim to Rs. 14,041/-. He did this sitting at Bhopal without seeing vehicle or visiting the spot. In the appeal, the appellant has challenged the order on the ground that arbitration clause does not take away the right of a consumer to seek remedy before a competent Forum. Appellant has produced several citations in support of this assertion. Counsel for appellant also challenged the correctness of changes made by third Surveyor sitting in Bhopal as also the long delay in settling his claim. We shall deal with the issues raised before us now.

We have heard both the parties and have also perused the records. We shall first consider the correctness of the order of the District Forum by which appellant was directed to obtain relief through reference to Arbitrator.

IT is not disputed that there is a clause in the insurance policy about referring any disputed matter for arbitration. However, it is also a common knowledge that arbitration proceedings take a long time. Also Arbitrator has to be paid fees. Even then the award has to be filed before a Court, having jurisdiction. The Court hears the matter in full and if it finds no grounds to set aside the award, it has to pass a judgment. All this take a long time. This dilatory process is totally dispensed with in the proceedings in the Consumer Forum. Also there are other issues like deficiency in service to a consumer by opposite party, which can only be decided quickly in Consumer Forum. Consumer Act thus provides a quick and cheap, inexpensive, judicious and expeditious remedy for the redressal of grievances of consumer and therefore, discretion of Consumer Forums should in all fairness must be exercised in favour of the consumer and against referring matter for arbitration. In the case National Insurance Company v. T.K. Raja & Anr., the State Commission of Tamilnadu has referred to the judgment of National Consumer Disputes Redressal Commission (For short National Commission) and referred hereafter as National Commission in Commercial Officer Telecom, District Patna v. Bihar State Warehousing Corporation, in which they held that existence of remedy by way of arbitration does not preclude an aggrieved consumer from seeking redress before the Forums constituted under the Consumer Protection Act. In the present case, it appears that District Forum dealt with the matter in a perfunctory manner and we are of the opinion that the view taken by them cannot be sustained and therefore, the order of District Forum deserves to be set aside. We shall now consider whether respondents can be held guilty of deficiency in service for taking one year or more to inform the appellant of their decision to accept liability of Rs. 14,041/-. It is not disputed that Insurance Company has the right to appoint qualified people as Surveyor to assess the damage technically for settling claims. We also think that it would be acceptable if more than one Surveyor is appointed to assess, provided the Insurance Company comes out with reasons for accepting the report of one Surveyor and rejecting report of another. In this instant case, record reveals that respondent Insurance Company appointed not one or two but three Surveyors. The last one gave his report sitting at Bhopal. Respondent has not given any reason for appointing so many Surveyors. It is also on record that the first two Surveyors were appointed immediately after the accident and within few days and month by Divisional Manager, Amrawati while the third one was appointed by Head Office. The amount of reasonable claim indicated by each Surveyor is in descending order. It is thus clear that the sole aim of Insurance Company was to some how find a Surveyor and a method of reducing the claim. Since no reason has been given for appointments of second and third Surveyors and since no reason has been given for accepting his report and rejecting the report of first two Surveyors, the conclusion is obvious that this action of respondent-Insurance Company is arbitrary and mala fide. It is common law that no arbitrary action can be held legal as it is against law of natural justice. Such action can also be termed deficiency in service.

RECORD reveals that respondent-Insurance Company took about a year or more to settle the claim filed by appellant. Hon''ble National Consumer Disputes Redressal Commission in the case of The Pen Co-operative Urban Bank Ltd. v. The Branch Manager, The Oriental Insurance Co. Ltd. & Anr; held that "two months time was sufficient for the settlement of claims". Even logically the Insurance Company ought to settle claims expeditiously, because when an individual or a party enters into a contract with an Insurance Company it does so with inherent faith that the Insurance Company will pay the money to his legal heirs quickly. It is an article of faith. In the old days the claims never lingered on. However, things have not been the same any longer. In the instant case the respondent- Insurance Company has taken one year to settle claim, that too, in a most arbitrary manner. In our opinion, the respondents are guilty of gross deficiency in service and must therefore, compensate the appellant adequately. We are fortified in our view by decision of National -Consumer Disputes Redressal Commission in the case of Umedilal Agrawal v. United India Assurance Co. Ltd. II (1992) CPJ 451 (NC), wherein it was held that failure to settle claim in reasonable time amounts to deficiency in service for which they have to compensate the aggrieved party. Considering the arbitrary action of respondents, we are of the opinion that claim of the appellant must be paid in full by the respondents. West Bengal State Consumer Disputes Redressal Commission in the case Kamalesh Singh v. National Insurance Co. & Anr., I (1994) CPJ 460, took a similar view. In the result of discussion in foregoing paragraphs, we hold that respondent-Insurance Company must pay Rs. 50,194/- to the appellant for their failure to give reasons for their action and acting arbitrarily. In addition they shall pay Rs. 2,000/- as compensation for the deficiency in service for their failure to settle the claim in reasonable time.

FOR the reasons mentioned in foregoing paragraphs the appeal succeeds and is allowed. Order dated 28.11.1995 of the District FORum, Betul is hereby set aside. Respondent shal1 pay to the appellant Rs. 50.194/- as final settlement of claim and Rs. 2,000/- as compensation within one month of the date of order. In case payment is not done within this period, the respondent shall pay 16% interest on entire amount till the date of payment. No order as to costs. Appeal allowed.