STUDIO SYNTHESIS INDIA vs NEW INDIA ASSURANCE CO. LTD.

COMPLAINANT is before us in this appeal. He is aggrieved by the order of the Delhi State Consumer Disputes Redressal Commission holding that there was no deficiency in service on the part of the opposite party-Insurance Company (respondent herein). However, direction was issued that on receipt of a reply from the petitioner-complainant in response to letter dated 23.6.1998 of the respondent-Insurance Company action shall be taken by the Insurance Company expeditiously. It would appear this letter dated 23.6.1998 of the Insurance Company relates to its offer to pay compensation on repair basis rather than on total loss basis in pursuance to report of Surveyor dated 21.6.1998.

A Cielo car of the appellant which cost him Rs. 6,33,455/- was comprehensively insured and it met with accident on 18.5.1998 during the currency of the insurance policy. By that time the car has run little over 7,000 kms. Appellant made a claim on total loss basis. However, relying on condition No. 3 of the policy, respondent took the stand that claim of the appellant could be settled on repair basis and it was not payable on total loss basis. This condition No. 3 reads as under : "The Company may at its own option repair, reinstate or replace the motor car or part thereof and/or its accessories or may pay in cash the amount of the loss or damage and the liability of the Company shall not exceed the actual value of the parts damaged or lost less depreciation plus the reasonable cost of fitting and shall in no case exceed the insured''s estimate of the value of the motor car (including accessories thereon) as specified in the schedule or the value of the motor car (including accessories thereon) at the time of the loss or damage whichever is the less."

It was submitted by Mr. Dhanda, learned Counsel for the appellant that the action of the respondent was arbitrary and that amounted to deficiency in service considering the amount of damages caused to the car. He referred to the report of the Surveyor filed by the Insurance Company to contend that car could not be put back into the same condition and that law of insurance was law of indemnity. It was, therefore, the case of the appellant that the claim should have been settled on the basis of total loss. If we refer to the report of the Surveyor he has assessed the liability of the respondent on repair basis at Rs. 2,11,770.50. To this we may add Rs. 30,000/- which according to Surveyor there would be further claim towards damage to the car after its dismantling. It may be noted that the amount on repairs basis which was calculated by the Surveyor and as noticed above was when the car had not been dismantled. Thus the total amount which would be claimed by the appellant would be Rs. 2,41,770.50. The amount required for the repairs of the car, as calculated by the Surveyor appointed by the Insurance Company had been brought on record on affidavit and there being no challenge to that. Therefore, it has to be held that the amount required for repairs would be Rs. 2,41,770.50. No doubt appellant did file the estimate for the repair of the car but that was without any affidavit. The value of the new car is now Rs. 5,24,225/-. Respondent-Insurance Company, therefore, could not be expected to pay for the new car when repairs would be carried out on the car involved in the accident to almost less than half of the cost of the new car.

We are, therefore, of the view that the amount of Rs. 2,41,770/- with interest @ 12% per annum from two months after the date of the accident of the car i.e. from 18.7.1998 till payment would meet the ends of justice. It was contended by Mr. Rawat, learned Counsel for the respondent that in this case no interest should be payable inasmuch as complainant rushed to the District Forum for relief without waiting for the respondent-Insurance Company to settle its claim. It may be so but then when Surveyor had given his report there was no justification for the Insurance Company not to pay that amount to the appellant or on his refusal of the offer, to deposit the same in the State Commission. We think claim of interest would be justified. The respondent Insurance Company shall pay to the appellant Rs. 2,41,770/- with interest @ 12% from 18.7.1998. This appeal is, therefore, allowed to the extent aforementioned. Appeal partly allowed.