SANTOKH SINGH vs ORIENTAL INSURANCE COMPANY LIMITED

THIS is the complainant''s appeal filed against order dated 6.10.2003 passed by District Consumer Disputes Redressal Forum-I, U.T., Chandigarh (for short hereinafter referred to as the District Forum) in Complaint Case No. 295 of 2002. The O.Ps. arrayed in the complaint were Oriental Insurance Company Limited through its Senior Divisional Manager, Divisional Office, SCO No. 99-100, Sector 17-B, Chandigarh and the Branch Manager, Oriental Insurance Company Limited, Branch Office, SCO No. 45, Sector 20-C, Chandigarh.

THE appellant purchased a second hand Maruti Zen Car Model 1995 having registration No. HR-34/0057 on 6.9.1999 from M/s. K.B. Concrette Fab. THE car was fully insured with the respondent-Oriental Insurance Company Limited (for short hereinafter referred to as the Insurance Company) against comprehensive risk vide Cover Note No. 493653 dated 23.3.1999 for the assured sum of Rs. 1,60,000/- . THE insurance was valid for the period from 25.3.1999 to 24.3.2000, the said car met with an accident on 21.9.1999 when the appellant along with his daughter were coming back from Amritsar. THE accident took place at Dalewala crossing on the G.T. Road, near Goraya in the State of Punjab. It is alleged that a cyclist came in front of the car and on applying brakes, the car skidded and causing injuries to the appellant and his daughter. The appellant intimated to the Branch Manager of the Insurance Company about the accident and damaged caused to the car. The car was handed over to the repairers M/s. Barua Duco Spray Painting Works, SCF-20-21, Sector 28-C, Chandigarh for necessary repairs. Prior to that, car was surveyed by the Surveyor deputed by the Insurance Company. The loss sustained as a result of accident was registered with the Insurance Company as Claim No. 313/2000. The company had deputed Capt. Gurdial Singh (Retd.) as Surveyor and Loss Assessor who finalised the loss at a sum of Rs. 44,243/- and the consent of the appellant for the said amount was obtained. The Surveyor had checked the registration book of the car and also the driving licence of the appellant. The report was submitted by the Surveyor recommending the loss to the tune of Rs. 44,243/-. The police report was also lodged in respect of the accident with the police station, Goraya, District Jalandhar on 29.9.1999 and its copy was also sent to the Branch Manager of the Insurance Company/respondent No. 2. Due to the difficulty in getting genuine spare parts for replacing in the damaged car and also due to the financial constraints, there was delay in getting the car repaired. The Insurance Company asked the complainant vide letter dated 20.2.2000 to furnish the registration book of the said accidented car duly transferred in his name, which was furnished by the appellant/complainant.

The Insurance Company further asked the complainant vide letter dated 14.3.2000 to contact the Surveyor for completion of formalities and the complainant was warned that in case of non-compliance of the formalities, the case will be closed as ''No Claim''. The complainant vide letter dated 28.3.2000 wrote to the Insurance Company that due to the non-availability of the spare parts, the completion report would be submitted later on and time was sought for submitting the same. The complainant vide letter dated 15.5.2000 informed the respondent No. 2 - Branch Manager of the Insurance Company that the said vehicle was ready and lying in the workshop of Barua Motors aforesaid. Thereupon, a second Surveyor Shri C.M. Kalia was deputed for re-inspection of the repaired care who submitted his re-inspection report to respondent No. 2 on 6.6.2000 without discussion/obtaining any consent of the complainant. The complainant furnished the bills of repairs and cash memo amounting to Rs. 69,551.96 ps. vide letter dated 10.4.2001 to the Insurance Company and also served a legal notice dated 6.9.2001 calling upon the Insurance Company to make the payment. A letter was also sent on 15.10.2001 to the Grievance Cell of the Insurance Company at the Head Office at New Delhi. Thereafter, a complaint was filed; before the insurance Ombudsman at Chandigarh on 6.11.2001 but he did not take any action on the ground that the jurisdiction of Ombudsman was barred since the complaint was filed after one year of the Insurance Company closing the file as ''No Claim'' on 14.3.2000.

SINCE the claim was not settled, the complainant filed the complaint alleging that there was deficiency in service on the part of Insurance Company and sought damages to the tune of Rs. 44,243/- as assessed by the first Surveyor. Rs. 15,000/- were claimed as damages together with Rs. 7,300/- as interest. The respondents were served with the notice and they filed joint written statement challenging, inter alia, that the complainant was not competent person to file the complaint as no contract of insurance was entered into between the complainant and the Insurance Company. The respondents further contended that despite letters written to the complainant, the complainant did not submit the report and complete the formalities and did not supply the bills and, as such, the Insurance Company closed the claim filed as ''No Claim'' on 22.3.2000. The report of the first Surveyor assessed loss to the tune of Rs. 44,243/- but when the vehicle was got re-inspected by Shri C.M. Kalia, the second Surveyor, he reduced that claim to Rs. 29,855/-.

THE complainant filed his own affidavit. THE respondent-Insurance Company filed affidavit of Shri K.S. Grover, Senior Divisional Manager and placed on record documents referred to above. The District Forum held that there was no specific contract between the transferee and the insurer, hence, there was no deficiency in service on the part of the Insurance Company in repudiating the claim. The complaint was accordingly dismissed. Feeling aggrieved against the impugned order, this appeal has been filed. The respondents have put in appearance, in response to the service of notice in appeal, through Mr. Ashwani Talwar, Advocate, whereas Mr. R.S. Guraon, Advocate along with Mr. R.K. Shukla, Advocate appeared for the appellant.

WE have heard the learned Counsel for the appellant and the learned Counsel for the respondents and have carefully perused the impugned order and the record of the case.

THE District Forum dismissed the complaint on the finding that the policy of insurance issued by the respondent-Insurance Company in favour of predecessor-in-title of the car could not be enforced for laying a claim in respect of the aforesaid vehicle as the provisions of Section 157 of the Motor Vehicles Act, 1988 were applicable but the risk against the third party only. THE District Forum placed reliance on the case of Complete Insulations (P) Ltd. v. New India Assurance Co. Ltd. I (1996) ACC 536=(1996) 1 Supreme Court Cases 221, and has quoted the law as settled by the Hon''ble Apex Court in its order. The contention of the learned Counsel for the appellant is that the provisions of GR 10 of India Motor Tariff incorporated by the Tariff Advisory Committee, Mumbai, enabled the transferee of the vehicle and the policy of insurance in respect of the vehicle to claim the benefit of the policy of insurance. GR-10 of Indian Motor Tariff provides as under: "10. Transfers- On Transfer of a vehicle, the benefits under the policy in force on the date of transfer shall automatically accrue to the new owner. If the transferee is not entitled to the benefit of the bonus or subjected to Malus already shown on the policy, the recovery of the differences between his entitlement (if any) and that shown on the policy shall be waived till the expiry of the policy. However, on expiry and/or termination of the existing policy the transferee will be eligible for bonus or subjected to Malus as per his own entitlement. If the transferee wants to change the Ppolicy in his name, it may be done on getting acceptable evidence of sale and a fresh proposal form duly filled in and signed. If a new Certificate of Insurance in the transferee''s name is required, his old Certificate of Insurance must be surrendered and a fee of Rs. 15/- must be collected. If the old certificate of insurance is not surrendered, a proper declaration must be take from the transferee before a new Certificate of Insurance is issued."

The appellant/complainant has placed the photocopy of the Indian Motor Tariff issued by the Tariff Advisory Committee, Mumbai as Annexure - A. Annexure - B is a circular issued by the Insurance Company, Head Office Hansalaya, 15, Barakhamba Road, New Delhi dated 24.6.1997. This circular was sent to all the Regional Offices/Faridabad Staff Training College, CMD Sectt. I.A.D. and all the departments of the Head Office regarding automatic transfer of the Insurance Policy to the new owner/purchaser of the second hand vehicle (GR-10 of the Indian Motor Tariff). The opening para of this circular refers to the decision of the Hon''ble Supreme Court vide judgment dated 21.11.1995, which obviously refers to the case of the Complete Insulations (P) Ltd. v. New India Assurance Co. Ltd. (supra) and cited before the District Forum. The opening para reads as under: "We refer to our earlier circular No. H.O.MOT:122:95:CR-4250 dated 20.12.1995 in regard to the above wherein we had advised you to repudiate the own damage claims where the R.C. was transferred in the name of the purchaser but the insurance had not been transferred in favour of the new owner. The above mentioned decision was taken on the basis of the Supreme Court judgment of 21.11.1995, but we have subsequently received a number of representations on this decision from various quarters. Accordingly the matter was reviewed afresh after getting a legal opinion on the Supreme Court judgment. The following facts in respect of judgment have now come to light: (i) The present Motor Vehicles Act, 1988 has come into force in July 1989 and GR 10 of the Indian Motor Tariff was introduced w.e.f. 1.4.1990 whereas the policy which was the subject -matter of the Court case pertained to the period 24.10.1988 to 24.10.1989. (ii) The policy in question incorporated the general exclusion of ''any accident, loss, damage and/or liability caused, sustained or incurred after any variation in or termination of the insured''s interest in the motor vehicle.'' As against this, policies issued after 1.4.1990 contain the clause ''however, where the ownership of the vehicle is transferred, the policy cannot be cancelled unless evidence that the vehicle is insured elsewhere is produced.'' Thereafter the matter was referred by us to GIC who in turn made a reference to TAC. It has now been decided by the TAC that there would not be any changes in the GR10 provision of the Motor Tariff as is existing and GIC have also confirmed that liability of the claims would have to be decided on the basis of the affected policy incorporating the GR 10 provisions. Accordingly, we confirm that for policies issued as per the revised Motor Tariff, own damage claims which fall within the purview of the GR 10 provisions may be settled in full subject to the other terms and conditions of the policy. This instruction will supersede the instructions contained in our earlier circular dated 20.12.1995. In case there are any claims which had been repudiated on the basis of our earlier circular and on which any representation has been received for reconsideration, R.Os. may examine such cases and permit re-opening of such claims on merits after review on a case to case basis. We trust the aforesaid instructions are clear and you are requested to ensure that the operating offices under your control are suitably advised in the matter. Sd/- (JACOB JOHN) Asst. Gen. Manager."

FROM this circular, it is evident that the Controlling Office/Head Office of the respondents-Insurance Company decided to extend benefit of the policy with reference to the vehicle transferred in favour of the transferee and decided that the provisions of GR-10 of India Motor Tariff will be applicable to such cases of own damages/claims, which are to be settled in full, subject to other terms and conditions of the policy. The respondents-Insurance Company, both Divisional Office and Branch Office, are bound by the aforesaid circular issued by the Assistant General Manager of the Insurance Company, Head Office at New Delhi and they cannot question legality or validity of such a circular. Coming to the instant case, the policy of insurance was taken by the vendor of the car vide cover note and the period of the policy commenced from 25.3.1999 and was valid up to 24.3.2000. The car met with an accident within the period of policy i.e. on 21.9.1999. It is not the case of the respondents that the policy, which was issued did not incorporate the provisions of GR-10 of Indian Motor Tariff.

IN our considered opinion, the District Forum was not justified in ignoring the aforesaid circular letter dated 24.6.1997 issued by the respondent-INsurance Company to the regional offices throughout country and to give effect to the provisions of GR-10 of INdian Motor Tariff even with reference to own damages claims. The said circular is binding on the respondents and they cannot ignore the same. Therefore, the stand of the respondent-INsurance Company in treating the claim case as ''No Claim'' is not in accordance with the policy of Headquarters communicated vide aforesaid circular dated 24.6.1997 (Annexure B) and this amounts to deficiency in service on the part of the respondents. Now coming to the damage assessed by the Surveyor and Loss Assessor, it may be pointed out that the Insurance Company in the first instance appointed Capt. Gurdial Singh (Retd.) who submitted his report and assessed the costs of Rs. 44,243/-. This report of the Surveyor was not accepted by the respondent-Insurance Company who proceeded to depute the second Surveyor Shri C.M. Kalia who submitted his report dated 6.6.2000 and assessed the costs of repairs as Rs. 29,835.14 ps. The complainant, however, claimed that he actually spent a sum of Rs. 69,551/- over the repairs vide Annexure C-9/1. It is now well settled proposition of law that the Insurance Company should not appoint second or successive Surveyors because of the report of the first Surveyor is not acceptable to the Insurance Company. The Hon''ble National Consumer Disputes Redressal Commission, New Delhi (for short hereinafter referred to as the National Commission) in the case of National Insurance Co. Ltd. v. New India Patiala Trading Co., I (2003) CPJ 33 (NC)=2002 CTJ 516 (CP), has authoritatively observed that "scheme of Section 64-UM of the Insurance Act, particularly of Sub-sections (3) and (4) would show that insurance companies cannot appoint second Surveyor just as a matter of course. If the report of the Surveyor or Loss Assessor is not acceptable to the insurer, it must specify reasons but it is not free to appoint second Surveyor."

IT appears from the affidavit of Shri K.S. Grover, Senior Divisional Manager of the respondent-Insurance Company that the vehicle in question was re-inspected by the Surveyor C.M. Kalia & Company. In Para 5 of the affidavit, it was deposed that Capt. Gurdial Singh was deputed to furnish the estimate of repair work and finalise the loss at Rs. 44,243/-. However, the vehicle in question was re-investigated by the company through the surveyor Sh. C.M. Kalia on 29.5.2000 after receiving telephone call from the repairer and after comparing the prices of the parts allowed by the Surveyor with the price list of Maruti Udyog Limited, reduced the amount from Rs. 44,223/- to Rs. 29,835/-. In para 6, it was deposed that the loss of the vehicle in question was assessed at Rs. 44,243/- by the Surveyor Shri Gurdial Singh but the same was reduced to Rs. 29,835/- after re-inspection of the vehicle. The circumstances in which the second Surveyor was appointed have not been deposed to in the affidavit. The averments made in the affidavit only show that the second Surveyor reduced the costs of the repairs from Rs. 44,243/- to Rs. 29,835/-.

IN our considered opinion, the action on the part of the respondents in appointing a second Surveyor without setting out any cogent reasons for not accepting the report of the first Surveyor is contrary to the law as settled by the Hon''ble National Commission in the case of National INsurance Company Ltd. v. New Patiala Trading Co. (supra). The costs of repairs at Rs. 69,551/- claimed by the complainant cannot be allowed as the same were not assessed by the authorised garage of Maruti Udyog Limited. It may also be mentioned that the submission of documents for settlement of the claim was delayed by the complainant himself and hence he is not entitled for getting any interest on the amount of the costs of the repairs from the respondents. Resultantly, the appeal is allowed. The impugned order is set aside. The complaint is allowed to the extent that the O.Ps. are directed to pay a sum of Rs. 44,243/- to the appellant/complainant within two months from the date of receipt of certified copy of this order failing which the aforesaid sum of Rs. 44,243/- shall carry interest @ 6% per annum till payment. The O.Ps. are also directed to pay a sum of Rs. 500/- as costs of litigation to the appellant/complainant. Copies of this order be sent to the parties free of charge. Appeal allowed.