United India Insurance Co.Ltd. vs ADARSH MEDICOS PVT.LTD.

THIS is an appeal against the judgment and order dated 10.1.2003 passed by the District Forum, Dehradun in Consumer Complaint Case No. 519 of 1994, Adarsh Medicos v. United India Insurance Co. Ltd. directing the appellant company to pay a sum of Rs. 67,100/- (Rupees sixty-seven thousand one hundred only) together with interest @ 18% p.a. and cost of Rs. 5,000/- (Rupees five thousand only).

THE brief facts of the case are that the complainant was the owner of a Maruti Car bearing registration No. DL-2CD-3025 which was insured from 29.9.1992 to 28.9.1993 for a sum of Rs. 1,69,000/- (Rupees one lac sixty-nine thousand only). On 12.4.1993 the car met with an accident near Mohand, Dehradun. THE accidented car was brought to Dehradun from Mohand through Jaggi Recovery Services on 13.4.1993 and left in the workshop of M/s. Pyarelal & Sons, Saharanpur Road, Dehradun. THE Insurance Company was given the estimate, copy of cover note and FIR . Sh. Prithipal Singh was appointed Surveyor. He found the damages and loss to be extensive and forced the complainant to arrive at the cash loss settlement instead of total loss settlement or otherwise. The Surveyor assured the complainant that if he is ready to settle the claim on cash loss basis, the complainant will get payment within 15 days from the date of his report. The complainant agreed for a sum of Rs. 65,000/- (Rupees sixty-five thousand only) so that the vehicle could be repaired in time. At the direction and insistence of the opposite party M/s. Pyarelal & Sons were agreed to get the vehicle repaired and the car was repaired. There was no satisfactory repair. The complainant had again to spend a sum of Rs. 25,000/- (Rupess twenty-five thousand only) for its repair. However, the claim was repudiated then the complainant filed the complaint in the District Forum.

The complainant has claimed a sum of Rs. 1,000/- (Rupees one thousand only) towards towing charges to which he is legally entitled. The fee of the Surveyor appointed by the Insurance Company was to be paid by the Insurance Company but here in this case the complainant paid it. The opposite party argued that the complainant was not bound to pay it, but it is not said that the complainant has bribed the Surveyor or had paid any reward or prize money to the Surveyor. The complainant is entitled to recover this. The complainant has also claimed a sum of Rs. 25,000/- (Rupees twenty-five thousand only) for second repair of the car to which the Forum has rejected. We also find that there is no worth in this part of the claim. Once the vehicle has been repaired at the cost of the Insurance Company again there is no question of again repairing it at the Company''s expenses.

THE complainant has claimed Rs. 1,08,184.67 (Rupees one lac eight thousand one hundred eighty-four and sixty-seven paise only) as stated by the Surveyor on total loss basis of Rs. 67,000/- (Rupees sixty-seven thousand only) on cash loss basis along with interest @ 18%. THE accident is admitted, the loss is admitted and extensive damage is also admitted. According to the opposite party it is the complainant who did not complete all the formalities, therefore, payment could not be made to him. In the grounds of appeal as well it has specifically been alleged by the appellant that the appellants are still ready and agreed to pay Rs. 28,808.60 (Rupees twenty-eight thousand eight hundred eight and sixty paise only) to the complainant. THE Insurance Company is duty bound to make the payment in case of damage to the insured vehicle if there is no breach of the terms of the policy. No breach as such is alleged here. It is the Insurance Company, which has appointed Sh. Prithipal Singh as Surveyor. Sh. Prithipal Singh has given the details of the damages, the injury to the Vehicle, the injury to the occupants and he has also given the details of repairs and replacement amount to Rs. 1,08,184.67 (Rupees one lac eight thousand one hundred eighty-four and sixty-seven paise only). Through letter dated 31.3.1994 the company has written to the complainant that his claim has been considered on repair basis. THE Surveyor gave the notes for the settlement of the claim, firstly on repair/replacement basis, secondly on the total loss basis and thirdly on cash loss basis. THE complainant was ready to accept the claim on cash loss basis and the Surveyor has also reported that it shall be the best option suited to both the parties. It is on this assurance that the complainant will get the insured amount within 15 days, he agreed to cash loss basis and got the vehicle repaired. THE repairer had also assured that he made the repair on this basis. At least there is no denial of the Insurance Company or affidavit of Sh. Prithipal Singh to the contrary. The vehicle was repaired with this amount of Rs. 65,000/- (Rupees sixty-five thousand only). God knows why Mr. Manvender Singh Uppal was again appointed Surveyor and he has out of his own reduced the claim to Rs. 28,808.60 (Rupees twenty-eight thousand eight hundred eight and sixty paise only). The mode by which he has given his report was surprising to the learned Forum as well.

DURING the course of arguments the learned Counsel for the Insurance Company Mr. L.D. Bhatia argued that the Insurance Company could have given the claim of Rs. 65,000/- (Rupees sixty-five thousand only) as well to the claimant but he did not complete the formalities. In a case of cash loss basis settlement in the rules of settlement of claim the Insurance Company has itself provided in Rule 7 that in such cases the Insurance Company has nothing to do except to cancel the policy. Thus salvage, etc. were not to be returned by the complainant to the Insurance Company under any provision of law and for this the claim could not have been rejected. The claim of Rs. 65,000/- (Rupees sixty-five thousand only) on cash loss basis is on the lower side, the complainant was ready to accept it only to get the vehicle repaired at the earliest and to avoid further litigation and disputes but the Insurance Company did not pay it. We have gone through the judgment recorded by the learned Forum. It is perfectly in order. The learned Forum has itself refused the claim of Rs. 25,000/- (Rupees twenty-five thousand only) of second repairs and Rs. 30,000/- (Rupees thirty thousand only) as compensation for mental pain and agony, etc. It has allowed only a sum of Rs. 67,100/- (Rupees sixty-seven thousand one hundred only) in which Rs. 65,000/- (Rupees sixty-five thousand only) for repairing charges, Rs. 1,000/- (Rupees one thousand only) for towing charges and Rs. 1,100/- (Rupees one thousand one hundred only) which were paid to the Surveyor by the complainant. This is a very fair and proper judgment based on law and facts. Coming to the rate of interest, the learned Forum has awarded interest @ 18% which is on a very high side. Today the rate of interest has been curtailed enormously by the banks. The learned Counsel for the complainant argued that he had been paying the interest @ 19% to the Bank from where he has got his vehicle financed. May it be true but he cannot claim interest at the same rate from others if he was paying exorbitant interest out of his own. The question is of entitlement and not of what he has out of his own paid to others. The complainant has referred the ruling reported in 2002 NCJ 214 (NC), National Insurance Co. Ltd. v. C.U. Ahmed Shafee and 2002 NCJ 215 (NC), C.U. Ahmed Shafee v. National Insurance Co. Ltd., in which it has been held that the complainant is entitled to the cost of transport of vehicle to the garage. We have also allowed it. In this ruling it was held that the rate of interest of 18% is justified. The amount of compensation in that case was Rs. 4,00,000/- (Rupees four lacs only) and there was concurrent finding of the State Commission for which the National Commission did not interfere but now the constant view of the National Commission is also that the rate of interest has been cut down by the Central Government and Banking Regulations to a very low extent and, therefore, in these circumstances we find that the complainant should get interest @ 12% only. The learned Counsel referred the ruling reported in, IV (2003) CPJ 75 (NC), Hari Om Sheetalaya (P) Ltd. v. Ram Kumar Yadav. In this ruling the case is of 1997-98 and interest was allowed @ 9%. The ruling reported in II (2003) CPJ 197, Senior Post Master v. Dinesh Kumar Sharma shall not apply to the facts of this case because that was a Post Office case where the rate of interest was allowed @ 5.5% but here in this case the accident took place in the year 1993 of which time the normal rate of interest shall be considered. in the ruling reported in I (2003) CPJ 502, Shatabdi Travels v. Arvind Kumar Gupta, also the rate of interest has been allowed @ 6% but this is a case of 1997 when the rate of interest has been cut down to a great extent. Similar rulings of 6% interest of several State Commissions were also referred but we are in the notice of the ruling of the Hon''ble Supreme Court reported in III (1996) CPJ 8 (SC), United India Insurance Co. Ltd. v. M.K.J. Corporation in which it has been held that : "What rate of interest the insured-respondent is entitled to get? In common parlance, when the insured-respondent is deprived of right to enjoy his money or invest the money in business, necessarily the loss has to be compensated by way of payment of interest by the Insurance Company. We are informed that as per the directions of the Government of India the appellant-Insurance Company has no option but to invest the money in the securities specified by the Government of India under which the Insurance Company is securing interest on investment at the rate of 11.3% per annum. Under these circumstances, the appellant-Insurance Company is liable to pay interest @ 12% per annum from January 1, 1991 till the date of payment."

We again emphasize that the rate of interest @ 12% shall be optimum interest in this case.

COMING to the cost of litigation as well which is on the very high side in our view, the cost of Rs. 2,500/- (Rupees two thousand five hundred only) shall be adequate cost to the complainant.

THE order under appeal is to be confirmed with this modification that the rate of interest is to be reduced to 12% and cost is to be reduced to Rs. 2,500/- (Rupees two thousand five hundred only). ORDER THE appeal is dismissed with partial modification that the complainant shall get interest @ 12% only and cost of litigation of Rs. 2,500/- (Rupees two thousand five hundred only). THE amount of award and other terms and conditions shall remain the same. Cost of the appeal shall be easy. Appeal dismissed.