R.Dhanalakshmi vs Oriental Insurance Co

THE complainant Dhanalakshmi had her vehicle, a lorry purchased by her for Rs. 5.61 lakhs, insured with the 1st opposite party Oriental Insurance Company, Virudhunagar. THE 2nd opposite party is the Regional Manager, Oriental Insurance Comany Ltd, Esplanade, Madras. THE vehicle met with an accident on 7.5.95 at Atul, Gujarat due to a tanker crashing with the vehicle. THE vehicle caught fire and was totally destroyed. THE accident was informed to the Insurance Company on 8.5.95 and a spot survey was conducted. THE vehicle was towed from Atul to Sattur by the complainant. THE opposite parties conducted a survey of the vehicle at Sattur also. According to the complainant, since M/s. Sundaram Finance Company with whose finance the vehicle was purchased on hire purchase agreement, insisted for repayment of the loan because of the accident, she borrowed from other sources money at 24% interest and paid off the amount due to M/s. Sundaram Finance Company. To get the cancellation of the hire purchase she had spent a sum of Rs. 18,742.56, and she had to pay to the Regional Transport office a sum of Rs. 15,350.55 to get a No Objection Certificate. Thus the complainant spent a sum of Rs. 34,107.56/-. THE complainant sold the salvage for Rs. 1,10,000/-. Deducting the said amount of Rs. 34,107.50 from the salvage amount, the balance salvage is Rs. 75,895.44. Deducting the above said balance salvage amount of Rs. 75,895.44 from the market value of the vehicle i.e., Rs. 5.61 lakhs, the complainant is entitled to the balance amount of Rs. 4,85,107.56 which can be rounded off to Rs. 4,85,108/-. THE complainant sent notice to the opposite parties on 22.9.95 demanding payment. Normally the Insurance Company will settle the amount within three months of the accident. But they have not paid any amount. Because of this attitude of the opposite parties the complainant had been put to lot of agony. For this, she is entitled to compensation of Rs. 50,000/-. THE complainant is entitled to interest at 24% p.a. on the above said sum of Rs. 4,85,108 / -from 7.8.95 to 11.10.95 the date of filing petition, which come to Rs. 20,414.40. Thus, till the date of petition the complainant is entitled from the insurance amount a sum of Rs. 5.05,522.40. On these allegations the complainant has prayed for an order directing the opposite parties to pay (a) a sum of Rs. 5,05,522.40; (b) 24% interest on Rs. 4,81,108/- from 11.10.95 till payment; (c) Rs. 50,000/- as damages for mental agony.

THE opposite parties in their written version contend that they have estimated that market value of the vehicle at Rs. 5,40,000/-. THE tarpaulin had been covered in a sum of Rs. 21,000/- separately. THE opposite parties did not ask the complainant to bring the vehicle from Atul to Sattur, and the towing had been done at the complainant''s own interest. THE claim form as received from the complainant on 26.5.95. he opposite parties had to make necessary enquiries from the R.T.O. as to whether the driver of the vehicle was authorised to drive heavy goods vehicle. THEy also had to make enquiries whether the driving licence of driver driving goods vehicle carrying hazardous goods like match box bundles which was carried by the vehicle at the time of accident requires a renewal every year. Under the terms and conditions of the policy, there is a ceiling fixed at Rs. 1000/- payable by the Insurance Company for towing of the vehicle involved in an accident. THE opposite parties had nothing to do with the complainant paying the hire purchase amount to M/s. Sundarm Finance Co. THE opposite parties are not liable to pay any amount for the alleged payment towards cancellation of hire purchase. THE opposite parties further contend that there were two different offers made for purchase of the salvage by two different persons, one for Rs. 2,15,000/-and the other for Rs. 2,20,000/-. THEreore the case of the complainant that the salvage fetched only Rs. 1,10,000/- cannot be accepted. According to the opposite parties the market value of the vehicle was Rs. 5,40,000/- and the salvage value was Rs. 2,20,000/-. Deducting the said salvage value from the market value, the opposite parties were liable to pay Rs. 3,20,000/-. With this a sum of Rs. 1,000/-shall be included for towing the vehicle, and a sum of Rs. 1,500/- has to be deducted as policy excess. Thus in all, the opposite parties will be liable to pay Rs. 3,19,500/- only. THE allegation that normally the Insurance amount will be settled within three months is not correct. THE claim of huge amount for mental agony is unsustainable. THEre was no deficiency of service on the part of the opposite parties. THErefore the complaint is liable to be dismissed. The points for decision are : 1. Whether there was deficiency of service on the part of the Insurance Company ? 2. To what relief, if any, the complainant is entitled.

Point No. 1: The accident happened on 7.5.95. The complainant has sent the claim form on 26.5.95. The complaint was filed on 11.10.95 i.e., 4 months after the submission of the claim form. In the meanwhile the complainant also sent a telegram on 22.9.95 demanding settlement of the amount on or before 10th October 1995. There was no response to this telegram. According to the opposite parties they were making enquiries regarding the particulars of the licence of the driver of the vehicle and also regarding the conditions of transport of inflammable materials. Even if this is true, this will not be enough to justify the lapse of 4 months time for settlement after receipt of the claim form. There was no communication from the opposite parties within the said time as to how much money the claimant is entitled to. In these circumstances it appears to us that the opposite parties were guilty of deficiency of service.

POINT No. 2 : It is not in dispute that the vehicle has been purchased by the complainant for a sum of Rs. 5.61 lakhs in December 1994. The accident occurred on 7.5.95. It is seen from the records that the vehicle had been insured for a sum of Rs. 5,40,000/- and the tarpaulin had been insured separately for Rs. 21,000/-. This is a case of total damage of the vehicle in the accident. Therefore the complainant would be entitled to the market value of the vehicle on the date of accident. The accident had happened about four months after the purchase. There would not have been appreciable wear and tear of the vehicle. In the complaint, the complainant''s claim is that the market value of the lorry on the date of the accident was Rs. 5.61 lakhs. The opposite parties would say in their written version that the market value of the lorry would be Rs. 5,40,000/-. It must be remembered that the tarpaulin had been separately insured for a sum of Rs. 21,000/-. It is apparent that when the complainant states that the market value of the lorry was Rs. 5,61,000/- it includes the market value of the tarpaulin also. The opposite parties state that the market value of the lorry was Rs. 5,40,000/-. It does not say anything about the tarpaulin excepting saying that it has been separately insured for Rs. 21,000/-. It is not in dispute that the vehicle was burnt in the accident. It can be presumed that the tarpaulin also should have been burnt. Thus considering, the claim of the complainant that the market value of the vehicle was Rs. 5,61,000/- at the time of accident can be taken as correct. In the case of total damage, as stated above, the claimant would be entitled to the market value of the thing insured on the date of the accident. But there is a question about the salvage. Since the complainant would be entitled to the market value of the vehicle at the time of the accident, he should not have done anything with the salvage. But the complainant has sold away the salvage and that is admittedly even without the knowledge of the Insurance Company. According to the complainant she sold the salvage for a sum of Rs. 1,10,000/-. But the value of the salvage according to the Insurance Comany is Rs. 2,20,000/-. As per Ex. B 2 Surveyor''s report dated 14.10.95, the value of the salvage ill not be less than Rs. 2,20,000/-. Ex. B-3 is a quotation dated 19.6.95 from one Venkatesan of Namakkal, to the Insurance Company offering to pay a sum of Rs. 2,20,000/- for the salvage. Ex. B is another quotation from one Mr. Nehru of Tiruchengode offering to pay Rs. 2,15,000/-. We find no reason whatsoever to reject the Survey report Ex. B 2 and the two offers Ex. B 3 and B 4. There is no reason whatsoever for the Insurance Company to fabricate the documents like Ex. B 2, B 3 and B 4 and for the Surveyor to boost the value of salvage. On the other hand, the complainant might be interested, as contended by the Insurance Company in the written version, in boosting the claim by quoting a lower price for the salvage having sold it without the concurrence or knowledge of the Insurance Company for a higher price. Thus considering, we are of the view that the claim of the Insurance Company that the salvage value was Rs. 2,20,000/- can be accepted as correct and not Rs. 1,10,000/- as stated by the complainant. According to the complainant she had spent a sum of Rs. 595.56 to the Fire Service Department of Gujarat. Regarding this there is no evidence. She then claims that she spent a sum of Rs. 397/- for conducting spot survey by one Mr. N.B. Sumanthirai at the instance of the opposite parties. Regarding this too there is no evidence. The further claim of the complainant is that she spent a sum of Rs. 11,750/- for towing the vehicle from Atul to Sattur. But according to the Insurance Company, for towing the maximum amount fixed as payable according to the terms of Insurance is Rs. 1000/ only, and this was conceded by the Counsel for the complainant at the time of arguments. Another sum of Rs. 6000/- is claimed by the complainant stating that this amount was spent for loading and cutting the frames. It is not understood what this really means, and it is not shown how the Insurance Company is liable to pay if any such amount was spent. Yet another sum claimed by the complainant is Rs. 15,365/- as the amount paid to the R.T.O. for cancellation of hire purchase. Regarding this too, it is not shown how the Insurance Company is liable to pay. Thus considering, we find that from the total cost of Rs. 5,61,000/- the salvage value of Rs. 2,20,000/- has to be deducted. As seen above, according to the Insurance Company a sum of Rs. 1500/- also has to be deducted as Policy excess. But it is not explained what is meant by this. So no such amount can be deducted. The admissible amount of Rs. 1000/- charges for towing and transportation has to be included and no other amount can be included. Thus calculated, the Insurance Company will be liable to pay a sum of Rs. 3,42,000/-.

THE further question is whether the complainant will be entitled to any interest. As stated above, for more than four months before the complaint was filed, the Insurance Company has not even informed the complainant as to what amount she was entitled to. According to the complainant, normally within three months time, an Insurance Company will settle the amount. This appears to be quite reasonable. In this position, we are of the view that the Insurance Company shall pay interest on the said sum of Rs. 3,42,000/- from 7.8.95 till date of payment. As regards the rate of interest, we think 18% p.a. would be reasonable. In respect of the claim made for the alleged mental pain and sufferings, since we are awarding interest on the amount payable for the delay, no amount need be awarded under this head. In the result therefore we direct the Insurance Company to pay a sum of Rs. 3,42,000/ with interest thereon at 18% per annum from 7.8.95 till date of payment. The amount shall be paid within 2 (two) months from today. The opposite parties shall pay costs of Rs. 2000/- to the complainant. Complaint allowed with costs.