RUGHA RAM vs NEW INDIA INSURANCE CO LTD

THIS revision petition filed by the original complainant challenges the order dated 07.08.2009 passed by the State Consumer Disputes Redressal Commission, Circuit Bench at Jodhpur, Rajasthan (for short, ''State Commission'') in Appeal No.27/2008 whereby the State Commission has partly allowed the appeal filed by the respondent/opposite party against the order dated 24.01.2008 passed by the District Consumer Disputes Redressal Forum, Pali, Rajasthan (for short, ''District Forum'').

THE District Forum vide its order had allowed the complaint of the petitioner in terms of the following directions: - "Consequently, for not to make payment for the claim amount to the complainant by the non -applicant is a deficiency in service and it is ordered that the non -applicant make payment to the complainant an amount of Rs. 9 lacs in a period of two months and pay an interest @ of 9% from the dated of 28.6.2005 to the date of realization on the above amount. The non -applicant shall be entitled to seize the disputed burnt truck. The complainant shall be entitled to get Rs. 1000/ - as costs of complaint."

THE State Commission vide its impugned order has modified the relief granted by the District Forum and has directed that the petitioner/complainant will be entitled to get a sum of ?4,33,103/ - instead of ?9 Lakhs from the respondent insurance company. Rest of the order has been upheld by the State Commission. Aggrieved of the order of the State Commission which has substantially reduced the relief granted to the petitioner, the petitioner has now approached the National Commission challenging the order of the State Commission through this petition.

WE have heard learned Mr. Deepa Ram Parmar, Advocate for the petitioner and Ms. Himani Bhatnagar, Advocate for the respondent.

BROAD facts including the coverage of the vehicle in question not being under dispute, only limited issue regarding the quantum of relief has been raised before us for decision in the given facts and circumstances of the case.

THE District Forum after considering the evidence adduced by the parties has granted relief to the petitioner on total loss basis of the truck which got extensively damaged and burnt during the course of fire accident in question. While accepting the complaint, the District Forum had recorded following reasons in support of its order: - "8. The second question which arises in this case is that whether the complainant is entitled for getting the amount of complete loss or Rs 433103 and 15 paise as per the final report of the surveyor. It reveals from reading of the survey report, which was submitted by the surveyor before us, that the whole truck of the complainant destroyed by burning. The surveyor has prepared the list of the articles damaged in truck, the amount claimed by the complainant and the estimate of surveyor. The surveyor has not allowed the claimed amount for the many parts of the truck but he has not given any ground for not allowing the amount in his report. Hence the surveyor''s report is not deemed fit as it is. There is one more contradiction in the surveyor report that he has recommended to pay total 433103 Rs and 15 paises as damages and the cost of ''Salvage'' has been estimated as Rs.20,000/ - while the insurance of the truck is for Rs.997500/ - if the amount of salvage is deemed Rs. 20,000/ - and the parts of rest amount should be save in truck but it does not appear from the survey report that the parts costing near about more than five lac Rs had saved from the burning. The surveyor has not considered proper to get the damages paid for the total loss of the truck and he has not given reasons for it. We have already seen that the list which has been prepared by the surveyor for the damage, he has not allowed the claimed amount for the many parts but he has not given any reason for not allowing this. Hence, in our opinion, the complainant is entitled for the amount on the basis of total loss. The complainant got the insured the vehicle for Rs.997500/ - just 3 months before the accident. So, even if the depreciation value is deducted and the amount is awarded to the complainant, the complainant is entitled for Rs. 9 lacs. The non -applicant is entitled to seize the truck as per rules."

ON the other hand, the State Commission has simply gone by the assessment made by surveyor and substantially reduced the relief. The perusal of the impugned order shows that the State Commission has justified the reduction in the relief to the petitioner in the following terms: - "We have perused the photograph of the truck taken by the appellant and we find that this matter was not really that of total loss. Because this matter is not of total loss, therefore, we shall have to make the surveyor''s report as a base. The respondent could not point out as to why the surveyor''s report should be rejected for which is such item which was not assessed by the surveyor i.e. of which assessment was not done. In our view, treating the surveyor''s report as a base, the respondent -complainant is entitled to get only Rs 4,33,103/ - as assessed by the surveyor. If the complainant does not accept the report of the surveyor, he can take legal action in Civil Court for the remaining amount."

LEARNED counsel for petitioner has contended that the State Commission has failed to scrutinize the documentary evidence on record and has arrived at erroneous conclusion while rejecting the claim of the petitioner on total loss basis and reducing it substantially without recording reasons for this conclusion. Learned counsel has submitted that the State Commission has simply gone by the report of the surveyor and treated it as the gospel truth without itself appreciating the evidence which would clearly show that the report of the surveyor containing the final assessment was faulty inasmuch as it did not reflect the loss caused to the vehicle which covered practically every part of the vehicle. He has pointed out that the final survey report does not give any convincing explanation regarding the rejection of the extent of damage assessed by Aruna Motors which shows that the estimated loss to the vehicle was of the order of ?10,97,747/ - in respect of the parts alone and an additional amount of ?1,69,000/ - would be required by way of labour charges for repairing of the vehicle. He has submitted that the vehicle in question was a brand new vehicle having been purchased on 26.03.2004 and it had been used for just about three months when the incident of burning took place on 13.06.2004. He has therefore strongly pleaded that the claim of the petitioner should have been settled on total loss basis as rightly upheld by the District Forum and the impugned order of the State Commission which has granted relief only on partial loss basis is not based on the extent of loss and evidence adduced by the petitioner.

PER contra, the counsel for the respondent has supported the impugned order and submitted that it is based on the final assessment done by the surveyor and in the absence of any cogent reasons, the State Commission was right in modifying the relief which had been unjustifiably inflated by the District Forum. She has further submitted that the scope of the revisional jurisdiction of National Commission under Section 21 (b) is very limited and can be invoked only where the fora below has exercised a jurisdiction not vested in it by law, or has failed to exercise a jurisdiction so vested or has acted in the exercise of its jurisdictional illegally or with material irregularity. Relying on the judgment of the Apex Court in the case of Mrs. Rubi (Chandra) Dutta Vs. M/s. United India Insurance Co. Ltd.,2011 3 Scale 54), she has submitted that since there is no such infirmity, the same should be confirmed and the revision petition be dismissed with costs.

WE have considered rival contentions and perused the record. We may note that soon after the incident of burning of the vehicle, spot survey was carried out by Sampatlal Lunia and his report dated 25.07.2004 is placed on file. This was followed by the final survey carried out by Laxmi Narayan Vyas, who was asked to conduct the survey on 30.07.2004 by the respondent insurance company and his report dated 04.02.2005 is also placed on record. In between, the vehicle had also been taken to Aruna Motors Garage whose estimates of repair to the vehicle have also been placed on record. As stated above, Aruna Motors have given estimates of repair to the vehicle which clearly indicates that it was a case of total loss. According to these estimates, a copy of which has been filed by the respondent insurance company, it is seen that the cost of restoration of the vehicle would be about ?13 Lakhs including the labour charges. Even though the spot surveyor has not given assessment in terms of the cost of damage to various parts of the vehicle, it does indicate that the damage to the vehicle was extensive and most of the parts and assembly line including the body of the vehicle got either melted or burnt. Coming to the final survey report, which has recommended settlement of claim only on partial loss basis to the extent of ?4,33,103/ - on which the State Commission has relied in its impugned order, we find that the surveyor has not given his assessment in respect of certain major parts like Engine Assembly, GB Assembly, RR Axle II, Rear Axle, Front Spring, Clutch Assembly etc. These parts account for more than ?6,27,649/ - out of the total estimated amount required for restoring of the vehicle. Surprisingly, the surveyor has not given any convincing reason or explanation for not assessing the extent of damages in terms of the cost involved for restoring each item. We consider it appropriate to reproduce this part of the surveyor''s report which would clarify the position: - ASSESSMENT SHEET VEHICLE NO.RJ22/G2773 A/c SH RUGA RAM S/O POONMA RAM CHOUDHARY Sl. No. PARTICULARS QTY RATE ESTIMATE AMOUNT ASSESSED AMOUNT REMARKS Estimate of M/s Aruna Motors METALLIC RUBBER GLASS 1 Engine Assly HINO6EE1 1 251160.00 251160.00 R/A Water inserted in block need boring 2 GB Assly ZFS636 1 70652.00 70652.00 N/A 3 Front Axle Assly 1 64428.00 64428.00 R/A 4 RR Axle II -2514 (1) 1 86704.00 86704.00 R/A Ends heat up and damaged 5 Rear Axle R 149 R149 1 136827.00 136827.00 R/A 6 Front Spring 2516 2 5390.00 10780.00 N/A - - - - - - - - - - - - - - 9 Clutch Assy 14" 4F NGR 1 7098.00 7098.00 - - - - - - - - - - - - - - - - - N/A Total Rs.6,27,649/ - - - - - - - - - - - - - - - - - - -

OUT of the remaining items numbering more than 275, the surveyor''s report shows that practically all of these items have got melted and only few of them have been shown to have got burnt or damaged. In such a situation, when the assessment of loss in terms of amount has been left out in respect of parts whose estimated value is about ?6,27,649/ -, it would be unjustified and unfair to rely on the surveyor''s report regarding the final assessment of loss while considering the claim of the petitioner. Following observations/remarks of the surveyor are significant which indicate that his assessment regarding the actual loss cannot be trusted and the same are reproduced thus: - "During the course of my survey I noticed that the vehicle was lying in the garage. There was no arrangement to get the Engine assly and major parts dismantled. Insured also agreed to the fact but he wanted to settle the claim on total loss basis. I explained him that total loss was not possible. To assess the loss of major parts and Engine assly. I requested the Insured to shift the vehicle at the authorized dealer''s workshop so that the vehicle may be got dismantled and loss can be assessed. Inspite of my repeated reminders and his assurance Insured has not shifted the vehicle at the authorized dealer''s workshop. I brought this fact to the notice of Insurance authorities. Then I was instructed to visit the workshop again. Insured arranged a mechanic and crane. I inspected the damaged parts minutely and assess the loss."

WE have analyzed the report of the final survey and find that following important aspects emerge from the analysis, which could not be disputed : - (i) Besides burning of the body of the vehicle including the wooden parts thereof, most of the 275 parts particulars of which are recorded in the report, got melted and the remaining few parts were either burnt or damaged. (ii) The 9 major parts, details of which are given in para 11, have been simply shown to have been heated up and damaged without proper assessment in respect of the amount required for their repair and restoration (if at all the same was feasible). (iii) No specific points of contradiction or loopholes have been recorded by the surveyor in respect of the estimates provided by Aruna Motors which is an authorized workshop and which carried out the work of assessment of damage and loss to the vehicle after the incident.

NO doubt that as per the legal position, the report of surveyor appointed by the insurance company to assess the loss in such cases is a valuable document and unless there are cogent and valid reasons which are recorded to be in writing such a report need not be refuted for the purpose of assessment of loss. In the present case, we find that the vehicle was a brand new vehicle and the loss which it had suffered during the course of incident of burning on account of the fire in which it got engulfed was extensive. After going through the two reports of the surveyors particularly the final report, we have no manner of doubt that if we take into consideration the probable loss to the major items left out by the surveyor, it is undoubtedly a case of total loss in which, by any stretch of imagination, it would not be feasible and practicable to restore the vehicle to a reasonably good condition without incurring huge expenditure which amount might equal to the price of vehicle itself. In this context, the estimates furnished by the authorized garage cannot be easily brushed aside. Under the circumstances, we find that the State Commission gravely erred in blindly relying on the report of the surveyor and ignoring the other evidence before it. When all the material evidence was already placed before it, it was highly incorrect and inappropriate on the part of the State Commission to have observed that in case the petitioner did not accept all the report of the surveyor he could take legal action in civil court for the remaining amount. This observation goes to show that the State Commission preferred to accept the report of the surveyor without analyzing evidence before it while modifying the order of the District Forum. Thus, the finding returned by the State Commission while substantially reducing the relief granted by the District Forum is without any basis and hence perverse. The impugned order passed by the State Commission suffers from material irregularity to that extent. We, therefore, do not agree with the view taken by the State Commission in reducing the relief granted by the District Forum which has passed its order after considering all the relevant aspects. In the circumstances, the impugned order is liable to be set aside. Accordingly, we accept the revision petition and set aside the impugned order with the parties bearing their own costs.