KERALA STATE CONSUMER DISPUTES REDRESSAL COMMISSION VAZHUTHACAUD, THIRUVANANTHAPURAM.

APPEAL NO.95/12

JUDGMENT DATED : 22/9/2012

PRESENT:

SMT. A. RADHA                              :  MEMBER

The Oriental Insurance Co. Ltd.,

Divisional Office,

Pattamana Building, R.S. Road,

Aluva.

(Represented by its Divisional       : APPELLANT

Manager, Thakaraparampu,

Thiruvananthapuram)

(By Adv. V. Manikantan Nair)

Vs

K.N. Ambujakshan,
S/o. Narayanan, Athira,

Mannam P.O., North Paravur.         :  RESPONDENT

(By Advs. L. Mohanan & M. Jayakumar)

JUDGMENT

SMT. A. RADHA : MEMBER

          The order under attack by the opposite party is passed by the CDRF, Ernakulam in CC No.557/09. The order is to pay the insurance claim of the complainant together with interest at 9% p.a from the date of the order.

          2.      It is the case of the complainant that the vehicle insured with the opposite party met with an accident on 02.06.09. On filing the claim form the complainant was offered an amount of Rs.7,752/- on cash loss basis against the repair charges of Rs.31,250/-. The allegation of the complainant is that the survey report does not contain proper assessment and hence the claim is to be considered on total loss basis. The act of the opposite party caused mental agony and also prayed for total loss claim and compensation of Rs.5,000/-.

          3.      The opposite party in the version admitted the policy. The claim form was submitted by the complainant on 3.07.09 and a surveyor was appointed and in the survey report, the claim was calculated on cash loss basis. The offer of settlement was not amenable to the complainant. It is contended that as per the terms and conditions, the opposite party is not liable to pay for a total loss and is obliged only for payment of the claim as specified in the survey report. The complaint is devoid of merit and there is no deficiency in service on the part of the opposite party.

          4.      The complainant was examined as PW1 and the commissioner as PW2. The insurance surveyor was examined as DW1. Exts.marked on the side of the complainant as Exts. A1to A9 and Ext.C1. Exts.B1 to B6 were marked on the side of the opposite party. The Insured Declared Value (IDV) of the vehicle was shown as Rs.20,800/- evidencing Ext.B3. The surveyor of the opposite party recommended the wreckage value of Rs.5,000/- and made an external assessment. The complaint was allowed on the expert opinion of the Commissioner who was deputed by the Forum below and assessed the damages of the vehicle to the tune of Rs.40,852/- and Rs.2,600/- as labour charges. The Forum below came to the conclusion based on constructive total loss on the ground that the aggregate cost of repair of the vehicle exceeded 75% of the IDV of the vehicle.

5.      The learned counsel for the appellant vehemently argued that the commissioner appointed to assess the loss was only an academician. He was not a licensed surveyor under 64 U of Insurance Act. The commissioner omitted to calculate depreciation and he is not an experienced surveyor. Further the objection raised by the appellant’s counsel is that the commissioner assessed the loss as per the market value of the spare parts. The estimated cost as per the commissioner’s report comes to Rs.43,000/- and the 75% of the total loss comes to Rs.26,072/- which means the assessed value exceeded the IDV of the vehicle. The vehicle is having more than five years old. No depreciation calculated as per the terms and conditions of the policy. The surveyor (DW1) assessed the loss and recommended an amount of Rs.11,667/- or cash loss basis of Rs.7,753/-. The surveyor assessed only to the extent of 55% of the insurance declared value. Therefore the claim cannot be calculated on total loss basis. It is also his submission that the Forum below failed to follow the preposition of law of the insurance which is only a contract. The policy conditions are bound by both the insured and insurer and cannot claim more than the terms and conditions. No deficiency can be attributed on the part of the appellant and prayed to set aside the order of the Forum below.

6.      The argument put forth by the learned counsel for the respondent is that the cost of repair assessed by the commissioner is to be looked into as per the commissioner’s report (Ext.C1). The report is based on the market value at the time of inspection. The commissioner in his cross examination admitted that he had not calculated the depreciation and the salvage value as per the Ext.B3 (A8). The IDV was Rs.20,800/- at the time of issuance of the policy and the vehicle is six years old. The detailed statement of the vehicle along with the labour charges submitted by the commissioner was calculated on total loss basis. Coming to the policy conditions the counsel pointed out

‘IDV shall be treated as the market value throughout the policy period without any further depreciation for the purpose of Total Loss (TL) Constructive Total Loss (CTL) claims’.

The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval or repair of the vehicle, subject to terms and conditions of policy, exceeds 75% of the IDV of the vehicle. Further the schedule of depreciation while fixing the IDV of the vehicle shows that the IDV of vehicle beyond the period exceeding five years is to be calculated at 50% of the depreciation for fixing IDV. In the instant case, the total repair of the vehicle exceeds 75% of the IDV of the vehicle. Hence it is to be calculated under total loss. He also pointed out that as per the surveyor’s report the estimated cost itself (Ext.B2) comes to Rs.31,200/- which itself is above 75% of IDV. The commissioner calculated the repair charges to the tune of Rs.43,452/- including the labour charges for which the depreciation of 75% is to be calculated and on that basis also the amount will come to Rs.26,072/-. Taking into consideration of all these aspects total loss basis is to be fixed as claim amount.

7.      Heard both sides in detail and this Commission find that the surveyor has not assessed properly whereas the commissioner had gone into detail of the market value of the spare parts. It is pertinent to point out that the commissioner has not calculated the salvage value or the depreciation. It was deposed by PW2 that no direction was given to calculate the depreciation or salvage value by both the parties and he was not aware of it. Taking into consideration that the repair charges of the vehicle has exceeded 75% of the IDV the claim is to be calculated under total loss basis. So this Commission is of the view that the IDV is to be paid in full ie Rs.20,800/- with 9% interest for the amount as the claim amount was not settled in time.

In the result, appeal is dismissed and allowed the complaint. The respondent/complainant is entitled to Rs.20,800/- with 9% interest from the date of complaint till realization. The respondent/complainant is also entitled for Rs.5,000/- as compensation. The order is to be complied within one month on receipt of this order, failing which the interest is to be paid @ 12% till realization.

Office is directed to send a copy of this order to the Lower Forum with the LCR.

A. RADHA                    :  MEMBER

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