DR. SADHNA SHANKER, MEMBER

1. The present two cross Appeals have been filed under Section 19 read with Section 21(a)(ii) of the Consumer Protection Act, 1986 (hereinafter referred to as “the Act”)  assailing the Order dated 09.03.2016 passed by the State Consumer Disputes Redressal Commission, U.T., Chandigarh (hereinafter to be referred to as “State Commission”), whereby the Complaint filed by the Respondent/Complainant was allowed.
2. Brief facts of the case as narrated by the Complainant in the Complaint are that he took an insurance Policy No. 2011-200502-14-1002862-01-000 for his car bearing registration No. CH-04J-5076 from the Opposite Party – Liberty Videocon General Insurance Company Limited which was effective for the period 28.02.2015 till 27.02.2016. The insured declared value (IDV) of the car was Rs. 22,68,000/-.
3. As per the complaint, on 23.08.2015 at about 3.00 am, when Mr. Ashwani Kumar was driving the vehicle on their way back to home, heavy rain and low visibility caused the Complainant’s car to become lodged in a waterlogged ditch in the middle of the road. The information about the said incident was promptly given to the Insurance Company. Subsequently, the driver and the Appellant's Surveyor visited the accident site, and after completing a spot survey, the surveyor recommended for shifting the car to the authorized BMW service center i.e. Opposite Party No. 3. The Complainant also stated that a DDR of the incident was registered at the local police station. Following an assessment of the vehicle on 04.09.2015, Opposite Party No. 3 generated a repair estimate valuing it at Rs.22,13,220/-. The Insurance Company caused delays in the approval process and on 11.09.2015 requested additional documents for claim processing.
4. The Complainant submitted the claim application along with all required documents. The insurance company was causing delays in claim approval. After representation dated 28.10.2015, the Surveyor prepared a report on 29.10.2015. However, upon reviewing the report, the Complainant discovered that the Surveyor had not considered the actual estimate provided by Opposite Party No. 3. Following a request from the Complainant to re-evaluate the surveyor's assessment, Mr. Mohit Sharma, the Surveyor issued an addendum survey report dated 06.11.2015 assessing an amount to Rs. 5,36,966/-. In the addendum survey report, the Surveyor did not confirm or reject the cost of the EXCH-Turbo, which was Rs. 1,42,347. The Surveyor stated that confirmation could only occur after dismantling of the car, despite the fact that Opposite Party No. 3 had already confirmed the defect in the Exch-Turbo in an email dated 03.09.2015 and the Surveyor was aware of this information. Additionally, the Surveyor did not approve a loss of Rs. 1,11,123/- for parts listed in the addendum report at Serial Numbers 1, 8, 9, 10, 11, 12, and 13.
5. On 02.11.2015, the Complainant received a letter from insurance company informing him that the licensing authority had been unable to verify the driver's license. Additionally, it stated that the repair liability of the Insurance Company amounted to Rs.8,33,586/-. The Complainant was requested to have the vehicle repaired and submit the repair bills for further claim processing. However, the total repair estimate, according to the Surveyor's assessment, was Rs. 18,62,602/-. This amount exceeded 75% of the Insured Declared Value (IDV) of the vehicle, and as a result, the vehicle was to be considered a constructive total loss, in accordance with the insurance policy's conditions. The records held by the licensing authority pertaining to Mr. Ashwani Kumar's driving license are currently unavailable, as they have been reported as missing. The licensing authority has taken the step of filing a First Information Report (FIR) regarding the loss of these records. The Complainant requested the Opposite Parties to re-assess their determination, as they argued that repairing the vehicle was not a reasonable or justifiable course of action, given its total loss status. They urged the Opposite Parties No. 1 & 2 to release the entire Insured Declared Value of the car. Because of the delays caused by Opposite Parties No. 1 and 2 in settling the claim, Opposite Party No. 3 was insisting on parking charges at a daily rate of Rs. 500 commencing from 15.09.2015. It is the case of the Complainant that the Insurance Company is solely responsible for covering these charges.         
6. The Complainant further submitted that the total loss assessment given by the Opposite Party No. 3 was given to the Insurance Company and all formalities with regard to the claim were completed but the Insurance Company did not make payment to the Complainant.  Instead, the Insurance Company sent a letter on 01.12.2015 stating:

“As per Surveyor’s Preliminary Survey Report, the tentative repairs liability of Vehicle is Rs. 8,33,586/-. So you are requested to get your vehicle repaired & submit us bills of repairs for further processing of subject claim”

“If you are not interested in repairs of the vehicle then we can settle your claim on Cash-Loss basis for Rs. 5,80,000/-

Please note that any future aggravation or deterioration to the vehicle which may take place due to delay on your part to fulfill the requirements will be solely your responsibility and the amount for the loss will be deducted from the final settlement amount.

Further, during the scrutiny of Driving License of Mr. Ashwani Kumar, vide No. 1788/LA/PKL submitted by you, it is found that the above said Driving License is issued for an effective period of 28 years, which is contrary to statutory provisions. As per Section 14(2)(b) of Motor Vehicle Act-DL can be effective for 20 years of till holders attaining 50 years age, whichever is earlier.

Please note that nothing contained in this letter is or should be construed as a waiver of any one or more rights on our part and all our rights under and in relation to the Policy remain full reserved.”

However, apart from the letter the claim was never formally repudiated by the insurance Company.

7. The Complainant filed a Complaint before the State Commission, with the following prayer :
   1. The O.Ps. may kindly be directed to pay the claim amount of Rs.22,68,000/- towards the Insured Declared value of the car.
   1.  
   2. Rs.1,50,000/- towards compensation and mental torture etc;

3. O.P No. 1 & 2 may kindly be directed to pay car parking charges @ Rs. 500/- per day w.e.f 15.09.2015 as demanded by OP No.3.
3.  
4. Interest @ 12% p.a. on the claim amount;

5. Rs.50,000/- as cost of litigation;

8. The Written Version was filed by the Insurance Company to resist the complaint. Opposite Parties No. 1 & 2- insurance company, acknowledged that they had insured the Complainant's BMW 5 Series 520 car for the coverage period from 28.02.2015, to 27.02.2016. Subsequently, they appointed an independent IRDA accredited Surveyor, Mr. Mohit Sharma, to assess the extent of loss and liability upon receiving notification of the vehicle's entrapment in a ditch and also underscored their request for necessary documentation from the Complainant, which was duly provided. The Surveyor then submitted a comprehensive preliminary survey report dated 29.10.2015 and clarified that, owing to the vehicle's age of over five years, depreciation was factored in as stipulated in Section I of the Insurance Policy, resulting in an assessment of liability amounting to Rs.8,33,586/-. Additionally, the Surveyor had retained judgment on the evaluation of the Exch-Turbo component due to concerns about potential damage. On 06.11.2015, the Surveyor issued an addendum report to provide further elucidation regarding parts that were excluded from the initial loss assessment. Opposite Parties No. 1 and 2 emphatically contended that claim disbursement was contingent upon compliance with the insurance policy's terms and conditions, and the Surveyor was not bound to adhere to estimates provided by either the Complainant or Opposite Party No. 3. They emphasized that the Surveyor's assessment was contingent upon the dismantling of requisite vehicle components by Opposite Party No. 3.
9. Opposite Parties No. 1 and 2 refuted the assertion that the Surveyor's report or the addendum report lacked adequate detail and further clarified that they had already corresponded with the relevant Regional Transport Office (RTO) to verify the authenticity of Mr. Ashwani Kumar's driving license, the driver involved in the incident.
10. They contested the Complainant's computation of the total repair estimate, asserting that it should be determined solely based on the Surveyor's report. Citing General Regulation 8 of the Indian Motor Tariff (IMT), which governs the terms and conditions of the insurance policy, they pointed out that a vehicle may only be categorized as a total loss if the repair costs exceed 75% of the insured value. In this instance, the Surveyor's assessment of Rs.8,33,586/- fell below 75% of the insured vehicle's value, which stood at Rs. 22.68 lakhs. Therefore, the vehicle could not be classified as a constructive total loss and preserved their right to repudiate the claim in the event that Mr. Ashwani Kumar's driving license was found to be counterfeit or invalid on the date of the accident. Furthermore, they affirmed that they had not provided deficient service and had not engaged in unfair trade practices and specifically denied the veracity of the remaining allegations, categorizing them as inaccurate.

By stating the above facts/objections in their Written Version, the Opposite Parties prayed that the Complaint may kindly be dismissed with cost.

11. After hearing both the Parties and appreciating the facts of the case, the State Commission partly admitted the Complaint with the following Order :
    1. To pay the amount Rs,22,68,000/-, to the Complainant, alongwith interest @ 9% per annum, w.e.f. 9.12.2015, within two months, from the date of receipt of a certified copy of this order, failing which the aforesaid amount will be payable alongwith interest @12% per annum from the date of default till actual payment.

2. To pay an amount Rs. 1,00,000/-, to the Complainant, as compensation for mental agony and physical harassment, within two months, from the date of receipt of a certified copy of this order, failing which, the aforesaid amount of Rs. 1,00,000/- will be payable alongwith interest @12% per annum from the date of default till actual payment.
3.  
4. To pay cost of litigation, to the tune of Rs.50,000/- to the Complainant, within a period of two months, from the date of receipt of a certified copy of this order, failing which, the aforesaid amount of Rs.50,000/- will be payable alongwith interest @12% per annum from the date of default till actual payment,
3.  
4. Since, admittedly the car, in question, is lying with Opposite Party No.3, the same can be collected by Opposite Parties No. 1 & 2, from it (Opposite Party No.3), after paying the amount of indemnification to the Complainant, as indicated in Clause (i) above, as well as parking charges, if any, to it (Opposite Party No.3).
4.  
5. Complainant shall execute the requisite documents, in favour of Opposite Parties No.1 & 2, for transfer of the vehicle, in question, in their name, so as to vest them with the ownership thereof, within one month of receipt of the amount of indemnification.
5.  

12. Aggrieved by the Order of the State Commission, the both sides, the complainant and the opposite party no. 1 - insurance company & the  dealer  have filed the present Appeals. The opposite party no. 1 – insurance company filed the complaint before this Commission with the following prayer:
    1. “allow the instant revision petition and set aside the impugned judgment and Order dated 09.03.2016 passed by Hon’ble State Commission in Complaint Case No. 301/2015 and passed by Hon’ble State Commission of U.T. Chandigarh.
    2. Cost of and/or incidental to this Appeal be paid by the Respondent;
    3. Such further and other Order or Orders be passed and/or directions be given as this Hon’ble Commission may deem fit and proper.”

13. In the oral arguments, the learned counsel for the Insurance Company reiterated the arguments averred in the Written Version filed before the State Commission. He stressed on the fact that basis of the claim settlement cannot be repair estimate provided by the workshop and the insured is liable to be indemnified subject to compliance of terms and conditions of Insurance Contract and on the basis of the report prepared by and independent Surveyor under the provisions 64UM(2) of the Insurance Act and that the driver of the vehicle did not possess a valid license to operate the vehicle.
14. In the Appeal, the learned Counsel for the Appellant/Insurance Company has cited following Judgments:

1. National Insurance Company Ltd. Vs. Girish & 3 Ors. (RP/958/2020), NCDRC.
2. New India Assurance Co. Shimla Vs. Kamla & Ors. (2001) 4 SCC 342.
3. National Insurance Company Ltd. Vs. Meena Aggarwal (2009) 2 SCC 523.
4. National Insurance Company Ltd. Vs. Swaran Singh & Ors.    

In the aforesaid judgments, the Hon’ble Court settled the law that the terms and conditions outlined in insurance contracts must be interpreted in a strict manner, and it is imperative that the individual operating the vehicle at the time of the accident possesses a valid driver's license.

15. The learned Counsel for the Complainant reiterated the arguments filed before the State Commission. He relied on the assessment provided by Opposite party No. 3 and not on the surveyor’s report and in the Appeal, the learned Counsel for the Complainant has cited following Judgments:

1. United India Insurance Co. Ltd. & Ors. Vs. Manjit Kaur & Ors. 2016 (1) CPR 291.
2. Bajaj Allianz General Insurance Co. Ltd. Vs. Bhavineni Madhavi & Ors. 2015 (3) CPR 760
3. New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787  

16. Heard the Learned Counsel for the Complainant and Ld. Counsel for the Opposite Parties; perused the material available on record.
17. There is no dispute to the fact that the insured’s Car met with an accident and was lodged in a waterlogged ditch in the middle of the road and got damaged.  The insured had a valid insurance and had intimated the Insurance Company shortly after the accident. The issue raised by the Insurance Company was that the driver of the vehicle did not possess a valid license to operate the vehicle. The issue raised by the Complainant was that the estimate provided by the Surveyor is incorrect as the vehicle has suffered a total constructive loss.
18. Regarding issue of validity of the driving license, the insurance company has relied on two RTI replies. The first RTI reply dated 23.10.2015 is addressed to the appellant Insurance Company from State Public Information Officer-cum-Assistant Superintendent (Treasury) O/o Sub Divisional Officer (N.) Panchkula. The authority has mentioned as under:

“With reference to your letter dated 07.10.2015 on the subject cited above, you are informed that due to loss of register No. 62 from 05.09.2001 to 10.12.2001 regarding licence No. 1788/LA/PKL 28.09.2001 an FIR No. 282 dated 07.07.2014 u/s 38 IPC was registered against Sh. Krishan, Clerk. Therefore, to verify this licence at this stage is not possible.”

19. The other RTI reply dated 11.08.2017 is addressed to Mr. Rajaram Shankar Modak, r/o Maharashtra from State Public Information Officer, Office Officer, Punchkula. The authority has mentioned as under:

“1. As per the Motor Vehicle Act 1988, Section 14 Clause 2 sub clause 2 b (i) a & b, a license for non-transport vehicle is issued for a period of 20 Yrs. and upto 50 Yrs. Of age, whichever is earlier.

2. As per record of this office, there is no such reported case wherein the license for non-transport vehicle that is issued for a period 28 Yrs.”

20.     The issue of validity, effectiveness and issuance of the Driving Licence has to be examined in the light of the facts of this case and the information placed on record referred to herein above.  It may be clarified that there are two provisions of the Motor Vehicle Act, 1988, which need reference.  The same are Section 3 and Section 149 (now Section 150 under the Amended Motor Vehicle Act, 1988).  The relevant extracts are quoted herein under:-

“3.   Necessity for Driving Licence – (1) No person shall drive a motor vehicle in any public place unless he holds an effective driving licence issue to him authorising him to drive the vehicle; and no person shall so drive a transport vehicle [other than [a motor cab or motor cycle] hired for his own use or rented under any scheme made under sub-section (2) of section 75] unless his driving licence specifically entitles him so to do.

150. Duty of insurers to satisfy judgments and awards against persons insured in respect of third party risks –

(2)   No sum shall be payable by an insurer under sub-section (1) in respect of any judgment or award unless, before the commencement of the proceedings in which the judgment or award is given the insurer had notice through the court or, as the case may be, the Claims Tribunal of the bringing of the proceedings, or in respect of such judgment or award so long as its execution is stayed pending an appeal; and an insurer to whom notice of the bringing of any such proceedings is so given shall be entitled to be made a party thereto, and to defend the action on any of the following grounds, namely:-

        (a) that there has been a breach of a specified condition of the policy, being one of the following conditions, namely:-

        (ii)     a condition excluding driving by a named person or by any person who is not duly licenced or by any person who has been disqualified for holding or obtaining a driving licence during the period of disqualification or driving under the influence of alcohol or drugs as laid down in Section 185;

21.   Perusal of the aforesaid provisions would indicate that the phrase “Effective Driving Licence” is provided for in Section 3, the Heading whereof is necessity for Driving Licence.  This casts an obligation on a person to possess an effective driving licence and to hold it while driving a motor vehicle in a public place.  The word “Effective” means that the holder of the licence should be possessed of an authorized license for driving a motor vehicle. 

22.   The grant of a licence is provided for in Section 9, which is the legal provision through a law made by Parliament and such a licence in accordance with law, if granted would be a valid driving licence. 

23.   There is another Section of the Motor Vehicles Act, which needs to be referred to as the same is the basis of the challenge raised to the validity of the licence by the Insurance Company.  This is Section 14 (2) (b) (i).  The entire provision is not being quoted as that is not relevant for the present controversy.  The extract is quoted herein under:-

“14. Currency of licences to drive motor vehicle – (1) A learner’s licence issued under this Act shall, subject to the other provisions of this Act, be effective for a period of six months from the date of issue of the licence.

        (2)     A driving licence issue or renewed under this Act shall-

        (b) in the case of any other licence:-

(i)    if the person obtaining the licence, either originally or on renewal thereof, has not attained the age of [fifty years] on the date of issue or, as the cae may be, renewal thereof,-

(A)   be effective for a period of twenty years from the date of such issue or renewal; or

(B)   until the date on which such person attains the age of (fifty years),

Whichever is earlier.”

24.     The words used in this Section are about the effective duration of a licence. The legislature has used the word “effective” and not “valid” therein. However, a licence issued under Section 9 of the Act would be lawful and a legally effective driving licence for the duration mentioned above.

25.     The legislature while providing a defence for the Insurance Company in a Motor Vehicle’s Case in Section 150 (2) prescribes the grounds of defence available, and under sub-section (2) (a) (ii) provides for exclusion if the person driving the vehicle is “Not Duly Licenced”.  Thus, this provision further adds another shade to the effectiveness of the licence by using the word “Duly”, which means in accordance with and in a proper manner, that is to say in a regular way through the adequate procedure.

26.     Thus, the effectiveness of a licence has to be understood in the aforesaid context that it has been duly issued and is a legally effective and valid licence for the period prescribed.  In the instant case, the period of effectiveness (validity) mentioned on the licence is 28 years.  The licence is stated to have been issued on 28/09/2001. The response from the public information officer is that the Register Number 62 from 05/09/2001 to 10/02/2001 regarding issuance/grant of licence was missing from the office and a FIR was lodged on 07/07/2014 against the clerk concerned, hence it was not possible to verify the licence.

27.     The incident/accident in the present case took place on 23/08/2015. There is another RTI addressed to Mr. Raja Ram Shanker Modak dated 11/08/2017 which answers a general question regarding the issuance of a licence for 28 years.  The Reply states that there is no reported case where a licence was issued for a period of 28 years.  The said RTI was not specific to the licence of Mr. Ashwani Kumar, the Driver whereas the earlier RTI Reply dated 23/10/2015 was specific to the licence of Mr. Ashwani Kumar.  It is thus clear from the aforesaid two informations that the licence of Mr. Ashwani Kumar could not be verified as the concerned register was not available.  The Reply under the RTI was to the Insurance Company and therefore the Insurance Company failed to establish with any cogent Evidence that the licence was fake or had not been issued.

28.     It is also relevant to refer to some of the Case Laws on the subject the leading decision on the issue is that of “National Insurance Company Limited Vs. Swaran Singh & Ors. 2004 Volume 3 SCC Page 297”  where the Apex Court in the Paragraph 92 raised this question and then proceeds to answer it in Paragraphs 99, 100, 101 and 110 (iii) (v) (vi) (vii), the same are extracted herein under:-

“92.   It may be true as has been contended on behalf of the Petitioner that a fake or forged licence is a good as no licence but the question herein, as noticed hereinbefore, is whether the insurer must prove that the owner  was guilty of the wilful breach of the conditions of the insurance policy or the contract of insurance.  In Lehru’s case the matter has been considered in some detail.  We are in general agreement with the approach of the Bench but we intend to point out the observations made therein must be understood to have been made in the light of the requirements of the law in terms whereof the insurer is to establish wilful breach on the part of the insured  and not for the purpose of its disentitlement from raising any defence or for the owners to be absolved from any liability whatsoever.  We would be dealing in some detail with this aspect of the matter a little later.

99.     so far as the purported conflict in the judgment of Kamla and Lehru is concerned, we may wish to point out that the defence to the effect that the licence held by the person driving the vehicle was a fake one, would be available to the insurance companies, but whether despite the same, plea of default on the part of the owner has been established or not would be a question which will have to be determined in each case.

100.   This Court, however, in Lehru must not be read to mean that an owner of a vehicle can under no circumstances have any duty to make an enquiry in this respect. The same, however, would again be a question which would arise for consideration in each individual case.

101.   The submission of Mr. Salve that in Lehru Case, this Court has, for all intent and purport, taken away the right of an insurer to raise a defence that the licence is fake does not appear to be correct.  Such defence can certainly be raised but it will be for the insurer to prove that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence held by the driver.

110    The summary of our findings to the various issues as raised in these Petitions is as follows:-

(iii)    The breach of policy condition e.g disqualification of the driver or invalid driving licence of the driver, as contained in sub-section (2) (a) (ii) of Section 149, has to be proved to have been committed by the insured for avoiding liability by the insurer, mere absence, fake or invalid driving licence or disqualification of the driver for driving at the relevant time, are not in themselves defences available to the insurer against either the insured or the third Parties.  To avoid its liability towards the insured, the insurer has to proved that the insured was guilty of negligence and failed to exercise reasonable care in the matter of fulfilling the condition of the plicy regarding use of vehicles by a duly licensed driver or one who was not disqualified to drive at the relevant time.

(v)     The Court cannot lay down any criteria as to how the said burden would be discharged, inasmuch as the same would depend upon the facts and circumstances of each case.

(vi)    Even where the insurer is able to prove breach on the part of the insured concerning the policy condition regarding holding of a valid licence by the driver or his qualification to drive during the relevant period, the insurer would not be allowed to avoid its liability towards the licence is/are so fundamental are found to have contributed to the cause of the accident. The Tribunals in interpreting the policy conditions would apply “the rule of main purpose” and the concept of “fundamental breach” to allow defences available to the insurer under Section 149 (2) of the Act.

(vii)   The question, as to whether the owner has taken reasonable care to find out as to whether the driving licence produced by the driver ( a fake one or otherwise), does not fulfil the requirements of law or not will have to be determined in each case.”

          The same ratio that the onus of proving that the insured did not take adequate care and caution to verify the genuineness or otherwise of the licence is on the insurer was held in “Nirmala Kothari Vs. United India Insurance  Co. Ltd.  in Civil Appeal Nos.1999-2000 of 2020 decided on 04/03/2020.” The aforesaid proposition of law has again been followed in the latest judgment of the Apex Court in “IFFCO Tokio General Insurance Company Limited Vs. Geeta Devi & Others 2023 SCC Online SC 1398.

29. It was not clarified during the course of the hearing as to how the RTI dated 11.08.2017 is related to this case. Further this is a general reply and not in respect of the licence in question. It is seen from the RTI replies that it cannot be conclusively proved that the Driving License is false, forged or fraudulent. Apart from this the Insurance Company has failed to provide any other documentary evidence to prove that the license is false, forged or fraudulent. 

Furthermore, the copy of the license presented by Mr. Ashwani Kumar was valid until 16.01.2029 and the accident occurred on 23.08.2015 i.e. within the 20 years period of a valid license. Even if the year of expiry is incorrectly endorsed as valid upto 2029, the license was well within the validity period of 20 years on the date of the accident. The plea of the appellant regarding the question of licence is therefore not valid and legally sustainable.

30. On the other issue we would like to rely on the order of this Commission in United India Insurance Co. Ltd. & Ors. Vs. Manjit Kaur & Ors. 2016 (1) CPR 291 decided on 04.12.2015, the relevant para is reproduced below :-

“7. The contention of the learned counsel for the petitioner is that the vehicle is to be treated as a CTL only if the cost is retrieval of repair to the insurance policy after applying the depreciation in terms of the insurance policy, exceeds 75% of the IDV of the vehicle. I however find no merit in this contention. In my opinion, the above referred clause envisages the insured vehicle is to be treated as a CTL if the total cost of its repair or retrieval thereupon of the contribution of the insurance company exceeds 75% of the IDV of the vehicle. Had the intention been to treat the insured vehicle as a CTL only in a case where the cost of repair to the insurance company been more than 75% of the IDV of the vehicle, the above referred clause would have been worded altogether differently. The clause as it appears in the insurance policy clearly means that if the total cost of repair or retrieval of the vehicle irrespective of who bears the said cost, exceeds 75% of the IDV of the vehicle, the insurance company has no option but to treat as a Constructive Total Loss (CTL). In the present case, the total cost of repair/retrieval of the vehicle as per estimate given by M/s Goyal Motors exceeded 75% of the IDV of the vehicle and therefore, the insurance company was required to treat as a Constructive Total Loss, unless it is shown that the said estimate was not a fair and correct estimate of such repairs.

8. The learned counsel for the petitioner points out that the total cost of repair or retrieval may not exceed 75% of the IDV of the vehicle even if the depreciation in terms of the insurance policy is not applied. On a perusal of the assessment made by the surveyor, I find that he has arbitrarily assessed the cost of parts as well as the cost of labour, without taking any estimate or quotation from the market. The complainant having obtained an estimate from the M/s. Goyal Motors, the surveyor, in my view, could have reduced the said estimate only on the basis of alternative quotations/estimates/price list and not on the basis of his own estimate of the cost of the parts and the cost of repairs. The surveyor reduced the cost of most of the parts without even indicating on what basis he had made the said deduction. This, in my opinion, renders the assessment made by the surveyor wholly arbitrary and irrational. Either he should have obtained quotation/price list from the market as regard the price of the parts of the motor parts or he should have obtained estimate from some other workshop indicating the cost of the parts. Similarly, he reduced the estimate of labour cost given by the M/s Goyal Motors, without finding out from the market whether any garage was ready to repair the vehicle at a lesser cost or not. Such a course of action in my view was wholly unwarranted. Therefore, from whatever angle I look at it, the cost of repair of the vehicle exceeded 75% of the IDV of the vehicle.”

31. Further we would also like to rely on the order of this Commission in Bajaj Allianz General Insurance Co. Ltd. Vs. Bhavineni Madhavi & Ors. 2015 (3) CPR 760 decided on 30.06.2015, the relevant para is reproduced below :-

“9. Undisputedly, the subject car was purchased by the respondent complainant on 21.01.2010 and it met with an accident in the same year on 30.09.2010. The petitioner is heavily relying upon the survey report of independent surveyor dated 21.01.2011. On perusal of the survey report, we find that the surveyor found that 90 spare parts of the subject vehicle were beyond repairs and needed replacement. The surveyor has assessed the net loss based on cost of repairs to the tune of Rs. 2,28,551/- and assessed the labour charges for repair of the car to the tune of Rs. 62,264/-. It is not clear from the report on what basis he has assessed the value of the spare parts. Therefore, we find it difficult to rely upon the survey report. Under these circumstances, taking into consideration that 90 spare parts of the car including major parts were found damaged beyond repairsit can be safely inferred that the insured car was damaged beyond repairs and it is a case of total loss. Our aforesaid conclusion is strengthened from the fact that respondent no. 2 who is authorised dealer of maruti has estimated the cost of repair of the car to the tune of Rs. 5,29,063/-. Thus, in our view the impugned order of the foras below cannot be faulted.

32. With regard to sanctity of survey report, we would like to cite an Order of the Hon’ble Supreme Court in the case of New India Assurance Co. Ltd. Vs. Pradeep Kumar (2009) 7 SCC 787, decided on 09.04.2009, the relevant para is reproduced below :-

“In the said decision, it is no doubt held that though the assessment of loss by an approved Surveyor is a prerequisite for payment or settlement of the claim, the Surveyor report is not the last and final word.It is not that sacrosanct that it cannot be departed from and it is not conclusive. The approved Surveyor’s report may be the basis or foundation for settlement of a claim by the insurer in respect of loss suffered by insured but such report is neither binding upon the insurer nor insured. On the said proposition, we are certain that there can be no quarrel. The Surveyor’s report certainly can be taken note as a piece of evidence until more reliable evidence is brought on record to rebut the contents of the Surveyor’s report.

33.     In the present appeals, it is evident from the documents available on record that the Complainant sent the vehicle to the BMW workshop on the instructions of the Surveyor appointed by the Insurance Company. The repair estimate provided by the workshop is comprehensive, detailing the cost of each and every individual spare part, including labor charges. In fact, the surveyor has also taken the cost of the spare part on the estimate provided by Opposite Party No. 3. In the present appeals as per the surveyor’s report the number of spare parts is 49 and the cost of which comes to Rs. 14,43,171.50 including 12.5% VAT. However, the surveyor has deducted 50% depreciation from the cost of spare parts while arriving at the final assessment of the loss. The Labor charge is estimated at Rs.1,14,000/- including 14% service tax without bringing on record any alternate rate chart against the estimate of Rs. 1,65,961.20 provided by the opposite party no. 3. It is also mentioned in the remarks of the surveyor’s report that the Exch-Turbo is a suspected part which might need be replaced upon inspection. It is important to mention here that as per email dated 03.09.2015 sent  by Opposite Party 3 to Opposite Party 1 & 2, it was informed that the Exch-Turbo is damaged and hence needs replacement. The estimated cost of the Exch-Turbo was Rs. 1,42,347.11.

34.     The root of the issue in the present appeal lies ‘whether there was Constructive Total Loss (CTL) of the subject vehicle or not’. The criteria for considering a vehicle as a CTL is “The insured vehicle shall be treated as a CTL if the aggregate cost of retrieval and/or repair of the vehicle, subject to terms and conditions of the policy, exceeds 75% of the IDV of the vehicle”. The estimate provided by the surveyor has assessed the cost of repair to be Rs. 8,33,586.00 which comes out to be about 36.75%. However, the said estimate of the surveyor was after adjusting depreciation value. If the depreciation amount is excluded then the estimate will come to Rs. 17,51,479.81 which would be about 77.22%. The concept of depreciation is adjustment of notional value which deducts value of an asset over its life. However, in the present appeals the actual cost that would have to be paid for repairs would be about 77.22% out of which the Insurance Company by its own estimate was willing to pay only 36.75%. It cannot be denied that the vehicle has suffered CTL as per the definition even if the Insurance Company is adjusting for depreciation. It is a matter of fact that vehicle would require extensive repairs and the Insurance Company cannot by way of depreciation deprive the insured of his rightful claim as the actual cost of repair that would have to be paid is not subject to depreciation, i.e. the workshop would require the same amount irrespective of the age of the vehicle.

We are of the view that the cost of repair of the vehicle certainly exceeds 75% of the IDV of the vehicle on the basis of the workshop’s estimate and therefore we see it as a total constructive loss which the Insurance Company is liable to indemnify.

35. In view of the discussion above, we are of the considered view that the Order of the State Commission does not suffer from any illegality. We, therefore, dismiss both the Appeals and uphold the Order of the State Commission.

36. Parties to bear their own cost. Pending application(s) if any, stand disposed of.