Vijay Singh Tomar vs NATIONAL INSURANCE CO. LTD

THIS revision petition has been filed under section 21(b) of the Consumer Protection Act, 1986 by the petitioner against the impugned order dated 09.08.2012 passed by the Madhya Pradesh State Consumer Disputes Redressal Commission (for short ''the State Commission '') in FA No. 354/2012, "Vijay Singh Tomar versus National Insurance Co. " vide which appeal filed against the order dated 10.01.2012 in complaint case no. 35/2010 passed by District Consumer Disputes Redressal Forum, Muraina, was partly allowed. The District Forum ordered that the OP shall make payment of claim on the basis of 100% damages according to IDV within a period of 30 days and also pay interest @ 7% p.a. with effect from 2.2.2009 in addition to Rs.8,000/- towards deficiency in service and Rs.2,000/- as litigation costs. The State Commission vide impugned order partly allowed the appeal of the present respondent/OP Insurance Company and directed them to pay Rs.2,00,000/- with interest @ 8% p.a. with effect from 2.2.2009 and also Rs.2,000/- as costs.

BRIEF facts of the case are that the petitioner/complainant is the registered owner of bus bearing no. MP-33/P0126 which was insured with the respondent/OP from 17.03.2007 to 16.3.2008 as per policy no. 321401/31/06/6300002091. The said vehicle got burnt on 12.2.2008 due to some accident and was completely damaged. The petitioner sent intimation to the insurance company which appointed a surveyor Ashok Gupta to make a spot-survey. The company thereafter appointed another surveyor Manohar Singh to make an appraisal of loss. The complainant presented a complaint no. 300/2008 before the District Forum on 15.10.2008 and the District Forum vide their order dated 2.2.2009 observed as under:- "Except that after prepared the report the surveyor kept it with him for two months. After two months later he has presented the above report before the Respondent Insurance Company. After filing the report before the Respondent Insurance Company dated 3/12/08 Respondent Insurance Company has not disposed of his claim petition till today. There is no justified reason for such late. So in this situation it is found that for disposal of claim the Respondent Insurance Company unnecessarily delayed and defaulter in service to petitioner, but this claim petition shall be disposed of by the Respondent Insurance Company on merits and demerits. In this situation it is not found fit to pass any order regarding compensation and regarding that petition of petitioner is pre mature. "

The surveyor Manohar Singh in his final report has stated that the loss assessed on repairing basis would be Rs.3,47,865/-; on cash loss basis it would be Rs.2,36,219/- and on total loss basis Rs.7,49,000/-. The company decided to make payment on the basis of cash loss basis and offered a sum of Rs.2,37,147/- to the petitioner but he refused to accept the amount and pleaded that he would accept that amount under protest only. There was correspondence between the petitioner and the company and ultimately, the amount of Rs.2,37,147/- was received by the petitioner under protest. The petitioner filed a consumer complaint in front of the District Forum again against the decision of the Insurance Company vide complaint no. 35/2010 saying that the insured amount of Rs.7,00,300/- should be paid along with Rs.1 lakh for mental / physical harassment and Rs.15,000/- for litigation expenses along with interest @12% p.a. on the amount of claim from the date of filing the same. The District Forum vide their order dated 10.01.2012 ordered that the payment of claim should be made on the basis of 100% damages, according to the IDV of the policy along with interest @ 7% p.a. from 2.2.2009, the date of earlier order passed by the District Forum and also payment of Rs.8,000/- towards deficiency in service and Rs.2,000/- as litigation cost should be made to the petitioner. The OP insurance company filed an appeal against this order before the State Commission and vide impugned order dated 9.08.2012, the State Commission observed that the petitioner had already received Rs.2,37,847/- under protest from the insurance company and he is entitled to get Rs.2 lakh more along with interest @ 8% p.a. with effect from date of the first order, i.e., 2.02.2009. It is against this order that the present petition has been made and as per the prayer, the petitioner has asked for award of Rs.7.5 lakh towards claim, Rs.1 lakh as compensation for mental and physical agony, Rs.15,000/- as cost of litigation along with interest @ 12% p.a. from the date of filing the complaint.

HEARD the learned counsel for the parties and examined the record.

IT was argued by the learned counsel for the petitioner that the vehicle had been totally burnt during the accident and hence they are entitled for payment of damages on total loss basis. The District Forum vide their order dated 2.2.2009 had commented on the working of the company saying that the report of the surveyor had been received quite late and the company was causing undue delay in the disposal of the claim. The District Forum observed that at this stage, it was not found fit to pass any order regarding compensation and they, therefore, directed the insurance company to dispose of the claim on merits, within 30 days of passing the order on 2.2.2009. The learned counsel further argued that the insurance company had earlier appointed a surveyor, Ashok Gupta for spot survey and hence, there was no justification for appointing another surveyor Manohar Singh. Moreover as observed in the order of the State Commission, there were serious discrepancies in the report submitted by Manohar Singh Surveyor. The petitioner had appointed their own surveyor Naren Sharma, who had given the report that the loss was about Rs.10.32 lakh. In the estimate made by the authorised dealer S.G. Motors, it had been stated that the expenses incurred to restore the previous conditions of the vehicle would be Rs.11,82,508/-. The surveyor appointed by the petitioner has produced photographs which show that the vehicle was completely damaged by fire. The Branch Manager of the Insurance Company had also filed an affidavit that if the damage to a vehicle was less than 75%, the claim was given on the basis of actual damage. In the present case, it was clear that the damage to the vehicle was more than 75%. The revision petition should, therefore, be accepted and the relief prayed for should be allowed. Learned counsel invited our attention to the order passed by Hon ''ble Apex Court in "Sri Venkateswara Syndicate versus Oriental Insurance Co. Ltd. and Anr. " [(2009) 8 SCC 507], in which it has been held by the Apex Court that appointing surveyors one after another so as to get a tailor-made report to the satisfaction of the insurer, is impermissible.

LEARNED counsel for the respondent Insurance Company, however, stated that the first surveyor Ashok Gupta was appointed just to have spot survey. The main surveyor in this case is Manohar Singh and it is not correct to say that Manohar Singh is second surveyor in the case. He stated that the report given by the surveyor appointed by the petitioner should not be relied upon as Naren Sharma was not an independent surveyor. The surveyor appointed by them had not taken into consideration the depreciation of the vehicle whereas the same should be taken into account while deciding the claim. Moreover, the surveyor of the petitioner has included many items in the report which are non-admissible. Learned counsel argued that they agreed with the order passed by the State Commission and the present petition should be dismissed.

IN reply, learned counsel for the petitioner again stated that it was a case of total loss and payment should be made in accordance with the IDV, i.e., Rs.7.5 lakh. We have examined the entire material on record and given a thoughtful consideration to the arguments advanced before us.

A perusal of the report submitted by Manohar Singh surveyor appointed by the Insurance Company indicates that he assessed the loss at Rs.2,37,147/- on cash loss basis and Rs.3,47,865/- on repair basis. In his opinion, as part of the report, the surveyor says that "Obviously, opting the settlement of loss in question on cash loss basis imposing the liability of insurance for Rs.2,37,147/- only would be more economical as compared to settlement on repairing basis, hence advised in the interest of the company. " In his earlier report, the surveyor Manohar Singh clearly stated that the assessment of loss on repair basis is Rs.3,42,865/- to Rs.3,47,865/-, on cash loss basis, Rs.2,36,219/- and on total loss basis, Rs.7,49,000/-. He recommended that payment on cash loss basis would be economical and in the interest of company.

IT is clear from the report of the surveyor appointed by the company that the prime focus of the surveyor is to look after the economic interest of the company, rather than to make his report on the reality of the situation. The State Commission vide impugned order also observed that the valuation done by Manohar Singh surveyor was very low and a large number of parts had been deleted from the said report. From the assessments made by dealers like S.G. Motors and the entire material on record, it is made out that the vehicle suffered an extensive damage and it is quite apparent that the loss in vehicle would be more than 75%. The estimate of S.G. Motor says that in order to restore the vehicle to its original condition, a sum of Rs.11.82 lakh will be required. The District Forum, therefore, after examining the entire evidence on record came to the conclusion that the Opposite Party should make the payment of claim on the basis of 100% damage according to the IDV of the policy along with interest @ 7% p.a. with effect from 2.2.2009 in addition to Rs.8,000/- for deficiency in service and Rs.2,000/- as costs. In the complaint filed by the petitioner, it has been stated that when proposals were demanded for disposal of the burnt bus, a proposal was received for buying the whole burnt bus as junk for an amount of Rs.49,700/-. The petitioner has requested in his complaint that he is entitled to get a sum of Rs.7,00,300/- (IDV Rs.7,50,000 - Rs. 49,700) as loss and Rs.1,00,000/- as compensation for mental harassment and Rs.15,000/- as litigation cost along with an interest @ 12% p.a. from the date of filing the complaint till realisation. The overall facts and circumstances on record make it amply clear that it is a case of total loss, where the damage to the bus because of fire incident is much more than 75%. It shall, therefore, be in the interest of justice that payment should be made by the Insurance Company as per the order passed by the District Forum but after deducting the salvage value of Rs.49,700/-. This revision petition is, therefore, accepted and the order passed by the State Commission is modified and the petitioner is directed to make payment of Rs.7,00,300/- to the complainant along with an interest @7% w.e.f. 2.2.2009 till complete payment within a period of 30 days from the date of pronouncement of this order. The petitioner should also make payment of compensation of a sum of Rs.8,000/- for deficiency in service and Rs.2,000/- as litigation costs. There shall be no order as to costs.