STATE CONSUMER DISPUTES REDRESSAL COMMISSION,

U.T., CHANDIGARH

(Complaint Case No.8 of 2010)

                                                                   Date of Institution: 16.02.2010

                                                                   Date of Decision  : 15.11.2010

M/s Bharat Construction, 9 PPCL Colony, Opposite Radha Swamy Satsang, Uday Vihar, Hardwar Bye Pass, Dehra Dun, Uttrakhand.

……Complainant.

V e r s u s

Divisional Manager, National Insurance Company Limited, Divn.1, 2^nd Floor, SCO No.133-135, Sector 17-C, Chandigarh.

              ....Opposite Party.

BEFORE:            HON’BLE MR. JUSTICE PRITAM PAL, PRESIDENT.

                        MRS. NEENA SANDHU, MEMBER

                        S. JAGROOP SINGH MAHAL, MEMBER.

Argued by:    Sh. H. L. Khanna, Attorney for the complainant.

                         Sh. Mrigank Sharma, Advocate for the OP.

PER JAGROOP SINGH MAHAL, MEMBER.

1.                     The complainant has filed the present complaint under Section 17 of Consumer Protection Act, 1986 (hereinafter referred to as the Act) to claim compensation for the total loss to the construction equipment vehicle (Dumper), which was insured with the OP for a total sum of Rs.33,10,560/-.

2.                     The complainant owned a Dumper, which was insured with the OP. The IDV of the Dumper was Rs.33,10,560/-. The Dumper met with an accident on 28.5.2007 while working at the work site near Bayal, Distt. Kullu, which resulted in its total loss. A claim was lodged with the OP. The complainant spent Rs.75,000/- on retrieving the wreck of the vehicle. The repair estimate was Rs.51,99,640/-, which was sent to the OP but it far exceeded the sum insured and therefore, the OP is said to be liable to pay the full amount of the Dumper. It was alleged that the OPs obtained from them a blank acceptance letter consenting to accept Rs.14 Lacs net of salvage/cash loss but the said amount was inadequate and therefore, they did not agree to that. As per the complainant, M/s V. K. Mehta Associates through their letter dated 24.9.2007 asked the complainant to send the vehicle to the workshop where the survey was conducted. Thereafter, the complainant on 12.8.2008 wrote a letter to the surveyor to supply a copy of the survey report, which was replied to vide letter dated 18.8.2008 stating that a copy of the survey report has been sent to the Insurance Company but no copy was given to the complainant. Being aggrieved, the complainant sent a notice dated 25.8.2009 to the OP but to no avail. It was averred that OP vide its letter dated 1.9.2009 finally closed the file/claim of the complainant. Hence, the complainant filed the present complaint seeking direction to the OP to pay the insured value of the Dumper ie.. Rs.33,10,560/- plus Rs.75,000/-, which the complainant spent as retrieving expenses. Apart from this, the complainant has also claimed interest @12% per annum on these amounts from 1.8.2007 till the actual date of payment. An amount of Rs.1,00,000/- has also been claimed on account of compensation for capricious exercise of power by the concerned staff of OP besides Rs.25,000/- as costs of litigation.

3.                     The OP opposed the complaint, admitting that the IDV of the vehicle in question i.e. Dumper was Rs.33,10,560/-. It also admitted the fact of lodging of the claim by the complainant  with it but it is stated that the complainant failed to produce the route permit, registration certificate as well as fitness certificate of the vehicle, which are mandatory before the vehicle is plied. It is next stated that even the temporary number of the vehicle was mentioned vide letter dated 1.5.2008 (Annexure R-2) as JH 05E-5565 whereas previously, it was being mentioned as JH-05-A-3515 of 2007 in the claim form and the Temporary Tax Token Receipt issued by Tata Motors Limited. It is next pleaded that as per the spot survey report dated 2.6.2007 (Annexure R-3), none of the registration certificate was valid on the date of accident i.e. 28.5.2007 as the temporary registration certificate had expired way back on 28.4.2007. It is further asserted that vide final survey report dated 30.10.2007, the surveyor has assessed the claim on the basis of net off salvage to the tune of Rs.24,98,000/- with a rider that extra excess clause if any may be deducted. In this report also, it is pleaded, as per the surveyor, neither the RC and route permit was produced by the complainant nor the load challan was shown. As per this final report, which is prepared on the basis of interim report dated 9.8.2007 (Annexure R-4), the estimated nett off salvage value is mentioned as Rs.20 Lacs. Pleading that the claim of the complainant was repudiated vide letter dated 22.2.2010 (Annexure R/1) to be genuine, the OP prayed for dismissal of the complaint.

4.                     Both the parties were given opportunity to lead evidence in support of their contentions.

5.                     We have heard the arguments of learned Attorney for the complainant as well as Sh. Mrigank Sharma, Advocate for the OP and have also perused the record including the written arguments.

6.                     The claim was repudiated by the OP on the ground that the vehicle was not having any route permit, fitness certificate and registration certificate. The contention of the attorney of the complainant is that in fact, no route permit or fitness certificate was needed for use of the vehicle and that the certificate of registration is not needed to the grant of compensation. In support of his contention, he referred to Section 66 of the Motor Vehicles Act, 1988 (hereinafter referred to as 1988 Act), which says that route permit is needed only in case of transport vehicle. He then referred to Clause (ca) of Rule 2 of Central Motor Vehicle Rules 1989, which defines “Construction Equipment Vehicle” and the Dumper is included under the said definition. The Dumper is not a transport vehicle and therefore, there is no need for a route permit for the vehicle.

7.                     As regards the fitness certificate, that also is needed in case of transport vehicles, which are to be plied on public place or roads but since, the Dumper is used at the place of construction work, no fitness certificate is not needed.

8.                     When the Dumper was purchased, a temporary Certificate of Registration was issued, which was valid only for a period of 30 days. The temporary Certificate of Registration had, therefore, expired on 28.4.2007 whereas the accident occurred on 28.5.2007. It is not the case of the complainant if they had applied for a permanent registration certificate. It is, therefore, admitted that on the date of accident, the vehicle was not duly registered.

9.                     The attorney has argued that even if there was delay in getting a vehicle registered, it carried only a fine of Rs.100/- under Sub Section (11) of Section 41 of 1988 Act and the non-registration does not affect adversely the claim of the complainant to get compensation. As against it, the learned counsel for the OP argued that it was a case of total loss and for paying compensation, it is necessary for the complainant to transfer the vehicle in favour of the OP. The vehicle can be transferred in favour of the OP on moving an application in prescribed form before the Motor Vehicle Authority and by making an endorsement on the Certificate of Registration in this respect in favour of the OP. In the absence of Certificate of Registration, it would not be possible to transfer the vehicle. During the course of arguments, we asked the attorney whether he was able to get the Certificate of Registration transferred in favour of the OP to which he replied in negative arguing that when the vehicle is not roadworthy, it cannot be produced before the Motor Vehicle Authority and no registration would be possible. In the absence of an endorsement in the registration, the ownership rights in the vehicle would not pass to the OP and therefore, the complainant would not be entitled to compensation in full as the salvage of the vehicle would remain the ownership of the complainant for which, the proportionate amount is to be deducted from the compensation.

10.                   As discussed above, it was necessary for the complainant to get the vehicle registered before the same was put to use. Having not complied with the law, he would not be entitled to full compensation. However, non-registration by itself cannot be a ground to repudiate the claim. The claim would be assessed on nonstandard basis i.e. 75% of the insured amount.

11.                   The OP had appointed surveyors who submitted their reports (Annexures R-4 and R-5) showing that the salvage value of the vehicle was Rs.12 Lac approximately. There is no evidence to rebut the same. When we deduct Rs.12 Lac out of the IDV of Rs.33,10,560/-, the complainant would be entitled to Rs.21,10,560/-. Since, he is entitled to 75% of the said amount, the compensation payable to the complainant comes out to be Rs.15,82,920/-. The complainant would retain the salvage.

12.                   It is also argued by the attorney of the complainant that they have spent a sum of Rs.75,000/- for retrieving the accidental vehicle. They, however, have not produced any document to prove the said payment. However, keeping in view the damage to the vehicle and its weight as mentioned in the Sale Certificate, we are of the opinion that a sum of Rs.20,000/- should be allowed to the complainant as retrieving charges.

13.                   The complainant has placed on file an acceptance letter wherein Rs.14 Lacs was agreed to be paid as the cash loss/net off salvage basis. The complainant wrote a letter dated 12.8.2008 informing the OP that an offer of Rs.14 Lacs was made by them on cash loss basis on behalf of the insurer but they were not willing to accept the same. This fact was mentioned by the complainant in Para No.3(vi) of the complaint. It was mentioned in reply that the said offer might have been made before the final survey was done by the surveyor and therefore, it having not been accepted by the complainant, cannot be taken notice of.

14.                   In view of the above discussion, we are of the opinion that the present complaint must succeed. The same is accordingly allowed. The OP is directed to pay the complainant an amount of Rs.15,82,920 + Rs.20,000 = Rs.16,02,920/- towards total loss of the vehicle in question along with interest @9% per annum since 1.12.2007 [i.e.30 days after the report (Annexure R-4)] till the amount is paid to the complainant. If the amount is not paid within 30 days from the date of receipt of copy of the order, the OP would be liable to pay penal interest thereon @12% per annum since 1.12.2007 till the date of payment. The OP shall also pay Rs.5,000/- as cost of litigation.

15.                   Copies of this order be sent to the parties free of charge.

Pronounced.

15^th November 2010.

Sd/-

[JUSTICE PRITAM PAL]

PRESIDENT

Sd/-

[NEENA SANDHU]

MEMBER

Sd/-

[JAGROOP SINGH MAHAL]

MEMBER

Ad/-

STATE COMMISSION

(Complaint Case No.8 of 2010)

Argued by:    Sh. H. L. Khanna, Attorney for the complainant.

                         Sh. Mrigank Sharma, Advocate for the OP.

Dated the 15^th day of November, 2010.

ORDER

                        Vide our detailed order of even date recorded separately, this complaint has been allowed.

(JAGROOP SINGH MAHAL)            (JUSTICE PRITAM PAL)     (NEENA SAHDHU)

                MEMBER                                      PRESIDENT                       MEMBER