SRI SHARFUDDIN vs REGIONAL MANAGER, NATIONAL INSURANCE CO. LTD.

IN this complaint, the complainant has prayed for a direction to the opposite party-INsurance Company to pay an amount of Rs. 10,60,200/- and interest including future interest and other reliefs reflected in the relief column of the complaint.

THE facts relevant for the disposal of this complaint briefly stated are as under : THE complainant is the owner of a Tata Goods Truck (1995 make) bearing C.H. No. 360324 CUQ 709587 and ENG. No. 679D23 CUQ 785392 with Registration No. KA-25 6686. THE same was insured with the opposite party. THE same was valid from 20.3.1995 to 19.3.1996. When this was so, the vehicle met with an accident on 30.7.1995 on its way to Yallapur and sustained damage. The complainant put in a claim with the Insurance Company. However, the Insurance Company repudiated the claim on the ground that there was a breach of conditions of policy inasmuch as, as many as 9 passengers were carried in the truck in contravention of the conditions reflected in the policy. Under the circumstances, the complainant has filed this complaint, claiming reliefs referred to hereinabove.

The complaint is resisted by the opposite party by filing their version. The opposite party has taken a contention that the complainant is not entitled to any relief having regard to the fact that there was a breach of condition of the policy on the part of the complainant since according to them the complainant carried 9 passengers in the vehicle contrary to the terms of the policy. The other allegations made in the complaint with reference to the quantum are all denied by the opposite party. The opposite party has prayed for the dismissal of the complaint.

THE complainant and the opposite party have filed their affidavits. Certain documents are also produced before this Commission. We have heard the arguments of the learned Counsel on either side.

The following Points arise for consideration : (1) Whether the comPlainant is entitled to comPensation? (2) If so, what is the amount to which the comPlainant is entitled? (3) What order? Point No. (1) :

We have already alluded to the facts leading to the accident in question. It is not, therefore, necessary to risk a rePetition by alluding to the same here. The fact that there was an accident on the alleged date is not in disPute. The fact that the vehicle in question was insured with the oPPosite Party is also not in disPute. The fact that the vehicle sustained damage is also not in disPute. The question is as to whether the vehicle in question was carrying Passengers contrary to the conditions reflected in the Policy of insurance. The imPortant asPect which is required to be considered in this context is as to whether the carrying of such Passengers by itself will enable the Insurance ComPany to rePudiate the claim. It is noticed that the Insurance ComPany has, in the course of its submission, mainly relied on the statement of certain witnesses recorded under Section 161, Cr.P.C. during the course of investigation in relation to the very accident. If a strict view of the matter is taken, it would follow that statement under Section 161, Cr.P.C. cannot be made use of for any other PurPose excePt for the PurPose reflected under Section 162, Cr.P.C. either for the PurPose of contradicting the witness in cross examination or for the PurPose of corroboration under certain circumstances. Under these circumstances, we felt at one stage that the submission made by the Insurance ComPany with reference to the said statement is required to be rejected in limine. However, it will have to be seen as to whether the statement of the witnesses recorded under Section 161, Cr.P.C. would helP the Insurance ComPany. Even assuming that the said statement can be accePted, Prima facie, as evidence, it is now well settled that mere carrying of Passengers in a goods vehicle, by itself, will not enable the Insurance ComPany to rePudiate the claim of the insured unless the Insurance ComPany establishes by accePtable evidence that the said event has contributed to the accident in question. In this connection, the decision of the Hon''ble SuPreme Court in B.V. Nagaraju v. Oriental Insurance Co. Ltd., rePorted in II (1996) CPJ 28 (SC)=AIR 1996 SC 2054. can be looked into with advantage. In the instant case, the Insurance ComPany has not Pleaded, much less established that the existence of certain Passengers in the vehicle has contributed to the accident. We have gone through the affidavit of the Insurance ComPany. We have also gone through the other materials on record. We do not find anything which would indicate that carrying of Passengers as such is resPonsible for causing the accident. Under these circumstances, it is obvious that the decision of the Hon''ble SuPreme Court, alluded to hereinabove, would aPPly on all force to the facts of the instant case also. Hence, it is clear that the comPlainant is entitled to damages and/or comPensation in resPect of the damage sustained to his vehicle. Point No. (1) is answered accordingly. Point No. (2) :

UNDER this point, what is required to be considered is as to what is the reasonable amount that can be awarded to the complainant towards the damages and/or compensation. The complainant has claimed Rs. 10,60,200/- in para 10 of his complaint. The complainant has enumerated the different items of amount under different heads. It is not necessary to allude to the same, at this stage, since in a case like this, the approach to be adopted is with reference to the damage sustained by the vehicle and other incidental matters. However, wherever and whenever it is necessary to refer to and consider the allegations reflected in para 10 of the complaint and the corresponding para in the affidavit, we will do so at the appropriate stage.

THE complainant has mainly relied on the affidavit filed by him as also the estimate regarding repairs given by the Garagemen and marked at inner para (2). He has incidentally relied on the Motor Survey Report dated 20.9.1995 which also shows the amount relating to repairs. THE complainant has further relied on the different paras in the affidavit filed by him. On the other hand, the opposite party has relied on the additional Survey Report dated 16.11.1995 and the affidavits of the officer of the opposite party. THE opposite party has also relied on the consent letter addressed by the complainant to the opposite party as also the affidavit of the complainant produced before the opposite party alongwith the consent letter. It is noticed that the Surveyor in his first report has assessed the liability on repair basis at Rs. 2,86,485.79 and on total loss basis at Rs. 2,24,500/ - subject to the realisation of wreck value. In his additional report, the Surveyor has assessed the liability on the opposite party at Rs. 1,82,219.20. It is true that the additional report of the Surveyor has been produced by the opposite party at a later point of time. However, the same was produced in the open Court at the time of arguments and in the presence of the Advocates for the other side.

The learned Counsel for the complainant however submitted that the said document was admitted subject to proof. It is needless to say that whenever and wherever the original is produced that itself is primary evidence having regard to the provisions reflected under Section 62 of the Evidence Act. It is not as if what is produced is a certified copy of the document. What is produced is the original document itself. It is not the contention of the complainant that the said documents are not the documents prepared by the Surveyor. In that view of the matter, it is obvious that the said documents will have to be necessarily looked into as a piece of evidence. We may also point out here that no serious efforts are made on behalf of the complainant to show as to how and why the report of the Surveyor should not be accepted.

IT is noticed that whenever and wherever the damage is required to be assessed regarding a vehicle in a case like the one in hand, there are different modes of assessing the liability. One mode is to assess the liability on repair basis, another mode is to assess the liability on total loss basis, the third mode of assessing the liability is on cash basis. If the liability is assessed on total loss basis, the entire vehicle will have to be surrendered to the opposite party. The learned Counsel for the complainant, however, submitted that the complainant is not in a position to accept the assessment of the liability on total loss basis and to surrender the vehicle. In that view of the matter, the question as to what is the liability on total loss basis does not arise. If that be so, it will have to be next seen as to whether the liability on repair basis can be considered. In our view, this aspect would crop up for consideration if and when the complainant takes up the vehicle for repairs and hands over the salvage to the opposite party. IT is not the case of the complainant that any repairs have been effected to the vehicle in question and that therefore the question of considering the liability on repair basis also does not arise. If that be so, what is left to be considered is the question relating to the assessment of the liability on cash basis. IT is noticed, as pointed out earlier, that the Surveyor in the course of his report dated 16.11.1995 has assessed the liability on cash basis at Rs. 1,82,219.20. IT is not shown by the learned Counsel for the complainant as to how and why it is wrong. Further, it is required to be noted, at this stage, that the complainant, in his letter addressed to the opposite party next before the complaint was filed, had expressed his willingness to take an amount of Rs. 1,80,000/-. The letter is not dated. However, it is seen from the seal of the opposite party embossed on the same that the same was received by the opposite party on 30.11.1995. Further, the complainant has also produced an affidavit before the opposite party. In that affidavit, also, among other things, it is stated as under : "In consideration of your paying a sum of Rs. 1,80,000/- (Rs. one lakh eighty thousand only) in respect of damage to the vehicle Tata Diesel Goods Truck bearing its RegistrationNo.KA-25/6686 insured under Policy No. 602602/31/21/94/01376 in Claim No. 602602/31/21/09/95 issued by Gokak Branch Office, hereby I undertake the responsibility of liability of third party claims except driver and cleaner of the said vehicle if any, arising out of the accident that took place on 30.7.1995 filed before the Competent Authority."

It is true that simply because the complainant had given his consent, he cannot be shut out from taking a contention that he is entitled to claim a higher amount. As a matter of fact, the decision of the Hon''ble National Commission in National Insurance Company Ltd. v. New Bharat Rice Mills, reported in II (1997) CPJ 77 (NC) would throw a lot of light on this aspect. We hasten to add here that the observation of the National Commission is slightly on a different point. However, the essence of the ratio reflected in the said decision will have to be applied mutatis mutandis to the facts of similar cases though the facts are slightly different. In that view of the matter, we are in agreement with the learned Counsel for the complainant that the complainant cannot be denied a higher amount simply because he had agreed for an amount as reflected in the consent letter addressed to the opposite party. However, we are indeed of the view that the said letter as also the affidavit, though would not serve, as a binding injunction against the complainant, will indeed provide a clue to the thinking of the complainant with respect to the amount which he can reasonably expect. Looked at from that point of view, we are of the view that the consent letter alongwith the affidavit delivered before the opposite party, appreciated in conjunction with the Surveyor''s report, would indicate that the amount assessed by the Surveyor is reasonable. Having regard to the totality of all these circumstances, we have no hesitation to hold that the complainant is entitled to an amount of Rs. 1,82,219.20 (it is rounded off to Rs. 1,82,220/-) towards the damage sustained by the vehicle in question.

IT will have to be next seen as to whether the complainant is entitled to any other amount by way of compensation on any other count. 16a. In para 10 of the complaint, the complainant has claimed compensation under various heads, viz., towards the total damages, towards the loss sustained by payment of interest, towards the loss of earnings, towards the expenses incurred in visiting the office of the opposite party, towards the expenses incurred in clearing the spot, towards the compensation for mental agony and towards the costs of legal notice. In our view, the amounts claimed against the various items mentioned in the complaint, except towards mental agony and towards the damage to the vehicle, appear to have no nexus to the essential criteria required to be adopted in a case like the one in hand. However, we are indeed of the view that the complainant is required to be compensated adequately by awarding suitable rate of interest and with reference to a particular date. IT is noticed that the first survey report is dated 20.9.1995 and the second survey report is dated 16.11.1995. Further, the decision of the Hon''ble Supreme Court, with reference to the passengers being carried in the vehicle and its impact on the liability to pay compensation or damages, was delivered on 20.5.1996. The said aspect was clarified by the Hon''ble Supreme Court in the said decision beyond a pale of doubt. However, it is noticed that notwithstanding the same, the opposite party persisted in repudiating the same not only on 30.11.1995 by its letter, but also in its version filed before this Commission as late as 9.7.1997. Under these circumstances, we are also of the view that the repudiation of the claim by the Insurance Company made by the complainant to the extent assessed by the Surveyor is not bona fide. In that view of the matter, the opposite party is obviously guilty of deficiency in service. This deficiency warrants a conclusion that the complainant will have to be suitably compensated for the delay on the part of the Insurance Company in making the payment of the amount legitimately due to the complainant. In our view, it would be just and proper to award interest at the rate of 18% p.a. from the date of second survey report, viz., from 16.11.1995 till payment. When we have adopted this modus operandi, we have in view the modus operandi adopted by the Hon''ble National Commission in the decision in United India Insurance Co. Ltd. v. Bearing Traders & Mills Stores & Anr., reported in III (1997) CPJ 104 (NC), paras 6 to 8 therein. The learned Counsel for the complainant also relied upon the decision of the Hon''ble National Commission in Jit Ram Shiv Kumar v. National Insurance Co. Ltd., reported in I (1994) CPJ 179 (NC). In para 19 in the said decision, it is stated as under: "There is, therefore, no doubt that the repudiation of the claim by the opposite party-Insurance Company is mala fide. There has also been inordinate delay in repudiating the claim depriving the complainant of a sum of Rs. 8,20,575 / - which obviously would have caused serious inconvenience and financial embarrassment of the insured.

We have carefully gone through the facts of the said case. In the instant case, it is noticed that before the decision of the Hon''ble Supreme Court in B.V. Nagaraju''s case, the decision of the State Commission and the National Commission in the very same case was holding the field. But for the decision of the Hon''ble Supreme Court, perhaps, the Insurance Company could not have been found fault with, with reference to the repudiation which it had made. In that view of the matter, it is not possible to say that the repudiation made by the Insurance Company on 30.11.1995 was mala fide because the judgment of the Hon''ble'' Supreme Court was delivered only on 20.5.1996. However, there was no justification on the part of the opposite party to repudiate the claim atleast to the extent assessed in Surveyor''s report in its version dated 9.7.1997. Under these circumstances, though we are not inclined to grant an amount of Rs. 1,00,000/- which was pressed into service by the learned Counsel for the complainant, we are inclined to grant an amount of Rs. 30,000/- by way of compensation. However, we are not inclined to grant any amount towards mental agony having regard to the fact that we have chosen to grant 18% interest on the amount of Rs. 1,82,220/-. If any amount is granted towards mental agony, the same would amount to double advantage to the complainant. The complainant is not entitled to any other amount under any other heads.

IN the result, we pass the following : ORDER The complaint is partly allowed. The opposite party-INsurance Company shall pay an amount of Rs. 1,82,220/- (Rupees one lakh eighty two thousand two hundred twenty only) to the complainant, together with interest on Rs. 1,82,220/- at the rate of 18% p.a. from 16.11.1995 till the date of payment. The opposite party shall also pay an amount of Rs. 30,000/- (Rupees thirty thousand only) by way of compensation and an amount of Rs. 3,000/- (Rupees three thousand only) towards costs of this proceeding. Complaint partly allowed.