Udai Pratap Singh vs NEW INDIA ASSURANCE COMPANY

THIS complaint was filed by Udai Pratap Singh on 13.3.1993 under the Consumer Protection Act, 1986. Briefly stated the following are the facts of the complaint.

THE complainant was owner of Mahindra Jeep Model 1989, Engine No. DM-47026, Chassis No. 47026, Registration No. U.P. 72/9009 which was purchased on 17.8.1989 from Agarwal Automobiles, Rewa after being financed by Pratapgarh Kshetriya Gramin Bank, at a cost of Rs. 1,46,039/-. THE vehicle was comprehensively insured from 17.8.1989 to 16.8.1990 and subsequently insured on 16.8.1990 through Policy No. 3142030504489 effective for the period of 16.8.1990 to 15.8.1991 for an amount of Rs. 1,30,000/- with the New India Assurance Company, Pratapgarh. This vehicle was snatched by miscreants on pistol point on 18.12.1990 at 7.30 p.m. near Village Raipur/Nayapurwa on Pratapgarh-Raibareilly Road, while on its way from Pratapgarh to Salaon. The First Information Report of the occurrence was lodged on the same day at 9.05 p.m. at police station, Lalganj by the driver of the vehicle Sri Janki Prasad Shukla. The information of the theft was also given to the opposite party No. 3.

The opposite parties got the incident investigated on their own by M/s. Singh Detective Services, who verified the incident of theft as true and recommended on 7.5.1991 that the insured is entitled to recover the loss from opposite parties as admissible under rules.

THE Surveyor of the New India Assurance Company-opposite parties assessed the total loss of Rs. 1,20,000/- vide report dated 15.8.1992. On the basis of two reports the local Assistant Branch Manager recommended the claim for payment of Rs. 1,20,000/- to the complainant. The police could not trace out the culprits and submitted a final report on 31.3.1991 for approval of the Chief Judicial Magistrate of Pratapgarh which was approved. Inspite of this the insurance claim has not been paid. The complainant was running from pillar to post and was incurring business loss. The vehicle is a financed one for which interest is being paid by the complainant due to negligence of the opposite party. The complainant has, therefore, requested that since the New India Assurance Company-opposite party could not settle the claim within a reasonable period inspite of legal notice given by him on 22.2.1993 and no reply was given by the opposite parties, he has asked for the relief of Rs. 1,30,000/- as value of the vehicle, interest @ 24.25% per annum, an amount of Rs. 500/- on the correspondence charges, raveling expenses and also compensation for business loss, harassment, delay in payment and mental and physical torture as also the cost of the complaint.

THE allegations contained in the complaint were supported by an affidavit filed by the complainant which is on record. Written Statement has been filed by New India Assurance Company-opposite party No. 1 on 17.4.1995. It was alleged that the claim of the complainant was not being delayed without any basis. The opposite party is a corporate body and has to fulfil the formalities prior to coming to any conclusion. It is also mentioned that a number of formalities were to be completed by the complainant and vide their letters dated 30.8.1994, 9.9.1994 and 10.11.1994 the complainant was required to complete certain formalities. The complainant only submitted a letter to subrogation, indemnity and transfer of the R.C. Book in the favour of the Company on 1.11.1994. Therefore, delay, if any was caused because of non-compliance of the formalities on the part of the complainant. The opposite parties in the affidavit and written statement also stated that the Company offered a sum of Rs. 1,20,000/- for the loss of the Jeep inspite of the facts that the complainant at the time of taking the insurance had mentioned that the vehicle in question was to be used for private purposes but in the R.C. Book and claim form the said vehicle was shown as taxi. It was for this reason that additional formalities had to be completed and delay was caused. The Surveyor had assessed a loss of Rs. 1,20,000/- which was approved by the Company. The complainant was offered a cheque of Rs. 1,20,000/- in the name of Pratapgarh Kshetriya Gramin Bank. He did not receive the payment as full and final settlement of his claim and therefore, the amount cannot be released. The Company is willing to deposit the amount of the said cheque if the complainant agrees to accept it as full and final settlement.

WE have heard Counsel for the complainant Mr. T.N. Saxena, Mr. B.P. Dubey Counsel had earlier appeared on behalf of the opposite party. As would be evident from the written statement of the opposite party, the insurance claim of the Company was approved by them in the year 1994 for Rs. 1,20,000/-. This amount of Rs. 1,20,000/- was initially not accepted by the complainant, this claim of the amount of Rs. 1,20,000/- was sanctioned in the month of February, 1995. It was on 15.2.1995 that a cheque of Rs. 1,20,000/- drawn on Bank of Baroda was handed over to the Advocate of the complainant vide order dated 18.4.1995 of this Commission subject to the complainant''s right to persue the matter in the present case. The case of the complainant that the vehicle in question was insured for Rs. 1,30,000/- and not Rs. 1,20,000/-. After perusing the record we find that the vehicle in question was purchased on 17.8.1989. The theft occurred on 18.12.1990. The amount assessed by the Surveyor was Rs. 1,20,000/- which was accepted by the opposite party. It will thus, be seen that a period of about sixteen months elapsed between the purchase of the vehicle and its theft. Normally, depreciation @ 5% depreciation is taken into consideration and the amount assessed by the opposite party at Rs. 1,20,000/-, appears to be alright and we are not inclined to interfere with the amount of the claim thus sanctioned.

THE next question is in regard to delay on the part of the opposite party in settling the claim of the complainant. In the instant case the theft took place on 18.12.1990. FIR was lodged on the same day. THE New India Assurance Company also engaged its own detective agency to investigate the theft and the said agency recommended the claim. This is not disputed by the opposite party in their written statement. Normally the New India Assurance Company should take a period of three months in settling the claim. In this case, a final report on the FIR was submitted on 31.3.1991 for the approval of the concerned Authorities. It is, therefore, not understood that once the detective agency of the opposite party after investigation recommended the claim and a final report was made by the police, then why the delay in settling the claim occurred. THE local Assistant Branch Manager of the opposite party prepared a claim report on 3.11.1992 and recommended a payment of Rs. 1,20,000 / - which is also not denied by the opposite party in the written statement. THE plea of the complainant in his rejoinder application that the final report in the criminal case was approved on 21.3.1991 and was brought to the notice of the opposite party still then, the opposite party deliberately delayed the settlement of the claim. THE opposite party should have finalised the claim quickly. Even then we allow a period of three months to complete certain formalities. THE complainant was required to complete the formalities at a very late stage. THE opposite parties should not have taken more than three months after 21.3.1991 and the settlement of the claim in any case should have been finalised and paid to the complainant by 30.6.1991 whereas the amount of claim was received by the opposite party on 18.4.1995 on the direction of this Commission. THE opposite parties were definitely conscious of the fact that the claim has been delayed without any valid reason. THEy insisted that the complainant should accept the claim as full and final settlement. We, therefore, hold that there has been deliberate delay and deficiency in service on the part of the opposite party in disposing of the legitimate claim of the complainant. It appears the complaint filed before this Commission, in the month of May, 1993 and as would be evident from the written statement of the opposite party the claim was settled in the year 1994 although the payment was made later on as discussed above. The complainant is, therefore, entitled to compensation because of delay from 1.7.1991 to 15.4.1995. Therefore, the opposite parties are liable to pay 15% interest on the claim of Rs. 1,20,000/- from 1.7.1991 to 15.4.1995. The complainant is also entitled to damages for harrassment, mental and physical torture for which we assess an amount of Rs. 5,000/-. ORDER

The complaint is allowed. It is directed that the opposite party Nos. 1,2 and 3 will pay to the complainant the amount of interest on Rs. 1,20,000/- @ 15% per annum from 1.7.1991 to 15.4.1995 as compensation and an amount of Rs. 5,000/- as damages, harassment and mental torture. He will also be entitled to Rs. 1,000/- as costs of the proceedings.

LET a copy of this judgment be made available to the parties as per rules. Complaint allowed with costs.